- Strong sales growth
- High momentum in development projects for the energy
transition and in Electronics
Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of
euros)
Q3 2021
2021/2020 as published
2021/2020 comparable
(a)
Group Revenue
5,834
+17.2%
+7.1%
of which Gas & Services
5,585
+16.9%
+6.5%
of which Engineering &
Construction
81
+36.9%
+35.1%
of which Global Markets &
Technologies
168
+16.9%
+15.9%
(a) Change excluding the currency, energy (natural gas and
electricity) and significant scope impacts, see reconciliation in
appendix.
Commenting on 3rd quarter sales for 2021, Benoît Potier,
Chairman and CEO of Air Liquide, stated:
“The third quarter confirms the continued sales growth observed
in the first half-year. All activities are increasing: Gas &
Services in all regions of the world, Engineering &
Construction and Global Markets & Technologies, in a
more favorable market environment.
Revenue in the third quarter amounted to 5.8 billion euros, i.e.
+17.2% as published and +7.1% in comparable terms. This
good performance illustrates Group’s strong positioning on its
markets and the robustness of its business model, in the
context of a strong surge in energy prices.
Within Gas & Services, which accounts for 96% of
sales, activity is particularly supported by the momentum of the
Electronics industry, the continued recovery of the
Industrial Merchant business and the robustness of
Healthcare activities. Mobilization of teams continued
this quarter in fighting the pandemic in several regions of the
world, particularly in the supply of medical oxygen.
Geographically, activity levels are particularly strong in the
Americas and Europe, and more contrasted in Asia.
The Group continues its momentum of improving its operating
margin, driven by operational efficiencies of 314 million
euros over the first nine months, in line with the annual
target of more than 400 million euros, and active price
management taking into account the inflationary context.
Cash flow remains high above 23% of sales excluding
energy impact.
12-month investment opportunities are increasing, now
reaching 3.3 billion euros, with more than 40% related to the
energy transition. In this context, the Group approved
investments of nearly 900 million euros this quarter,
notably in Large Industries and Electronics. One third of
industrial investment decisions will contribute to the energy
transition. The robust and diversified investment
backlog, currently running at 3.1 billion euros, is
particularly promising for future growth.
True to its growth model combining financial performance and
societal performance, Air Liquide has multiple
initiatives this quarter to promote hydrogen as a key
solution to fight global warming.
In 2021, Air Liquide is confident in its ability to further
increase its operating margin and to deliver recurring net profit1
growth at constant exchange rates.”
1Excluding exceptional and significant items that have no impact
on the operating income recurring. Excluding the impact of a
possible US tax reform in 2021.
Highlights of the 3rd quarter 2021
- Hydrogen and the energy transition:
- Many partnerships to develop hydrogen and decarbonize industry:
- Launch of the world’s largest clean hydrogen infrastructure
fund on October 1 with TotalEnergies, VINCI and several
international companies.
- Memorandum of Understanding with Borealis, Esso S.A.F.,
TotalEnergies and Yara International ASA to develop an
infrastructure for CO2 capture and storage that will contribute
to the decarbonization of the Normandy industrial basin.
- Cooperation project with TotalEnergies to decarbonize
hydrogen production on the TotalEnergies platform in
Normandy.
- Partnership with Airbus and VINCI Airports to develop
the use of hydrogen and accelerate decarbonization in the
aviation sector.
- Construction project in Germany of an industrial-size
renewable hydrogen production unit that will be linked to
the existing local Air Liquide pipeline
infrastructure.
- Project to invest in a large-scale hydrogen and carbon
monoxide production unit that includes CO2
recycling.
- Signing of a long-term renewable electricity purchase
contract in Belgium to reduce the carbon footprint of our
production plants.
- Increased support to the Energy Observer, becoming a
main partner for four years, of this laboratory vessel that
demonstrates the key role of hydrogen in the energy
transition.
- Equipment and services provided to the world’s largest
hydrogen station in Beijing, China.
- Long-term contract with Shagang in China for the
construction and operation of a low-carbon air separation
unit.
- Healthcare:
- Continued mobilization of teams in the fight against the
pandemic, worldwide.
- Corporate:
- Successful launch of a long-term bond issue for a total
of 500 million euros.
Group revenue for the 3rd quarter of 2021 totaled
5,834 million euros. The momentum in the first half-year
continued this quarter, with sales up +7.1% on a comparable
basis with the 3rd quarter of 2020 and about +6%
compared to the 3rd quarter of 20191. Consolidated sales of
Engineering & Construction grew +35.1% relative
to lower activity level due to the pandemic-induced slowdown in
2020. Global Markets & Technologies continued
double-digit growth: sales increased +15.9% in the 3rd
quarter, buoyed by the strength of the biogas market and equipment
sales for hydrogen mobility. The impact of energy this quarter was
particularly strong at +8.9%, on top of positive currency (+0.5%)
and significant scope (+0.7%) impacts. All in all, the Group
reported a very robust +17.2% growth in as published
revenue.
3rd quarter 2021 revenue for Gas & Services rose by
+6.5% to 5,585 million euros, confirming the upward
trend recorded in the first half-year, despite a less favorable
basis of comparison. As published revenue for Gas &
Services was up +16.9% in the 3rd quarter, benefiting from a
strong energy effect (+9.3%) and positive currency
(+0.4%) and significant scope (+0.7%) impacts.
- Gas & Services revenue in the Americas totaled
2,144 million euros in the 3rd quarter, an increase of
+8.2%. Large Industries sales rose +7.4% driven by high
demand and the ramp-up of new units. The Industrial Merchant
business continued to recover, with a +7.5% increase in revenue.
Electronics sales gained +6.6% in a thriving market. Lastly,
Healthcare grew +14.5% and remains heavily involved in the fight
against Covid-19.
- In the 3rd quarter, revenue in Europe rose by
+5.8% to 2,038 million euros. Large Industries sales
(+7.6%) expanded on strong demand in the Steel and Chemicals
sectors and on increasing volumes in Refining. Up +7.2%, the
Industrial Merchant business pursued its pick-up in sales across
all markets and countries. Healthcare revenue increased +2.6%,
despite exceptional high sales of ventilators in the 3rd quarter of
2020 to meet pandemic needs. It benefited from sustained sales of
medical oxygen to hospitals and strong demand in Home
Healthcare.
- Revenue in Asia-Pacific rose +4.1% in the 3rd
quarter to 1,197 million euros. Large Industries revenue
declined (-5.5%) due to the impact of China’s Dual Energy Control
and customer maintenance turnarounds. The upward trend in the
Industrial Merchant business continued with a +8.3% increase in
sales, fueled by strong activity in China and the recovery in the
rest of Asia. Electronics sales were up +10.8% in a very dynamic
market with double-digit growth in sales of Carrier gases and high
revenue generated by Equipment & Installations.
- Revenue in the Middle-East and Africa rose +10.4%
to 206 million euros in the 3rd quarter. The sales of
hydrogen in Saudi Arabia continued to recover, driven by the
customer demand in the Yanbu basin. The surge in air gas volumes
was very substantial as the 16 Sasol air separation units made
their first contribution (an acquisition finalized in June). These
sales were recognized as part of the significant scope effect,
hence excluded from the comparable growth. In the Industrial
Merchant business, sales continued to rise and are above the levels
of the 3rd quarter of 2019. The Healthcare business stayed very
buoyant supplying very large volumes of medical oxygen in
pandemic-hit countries.
2 See remark in the text box page 4.
Large Industries sales rose +3.4%, despite the
measures imposed in China to limit energy consumption at some
customer plants. The Industrial Merchant business recovered
further, with sales increasing +7.5% as gas sales were above
2019 levels and pricing impact accelerated significantly.
Healthcare also recorded a strong performance: sales rose by
+6.2%, despite a very high basis of comparison in 2020.
Electronics posted strong sales growth of +10.4% in a
very dynamic market.
Consolidated revenue from Engineering & Construction
gained +35.1% to 81 million euros in the 3rd
quarter.
Global Markets & Technologies posted a +15.9%
increase in sales to 168 million euros in the 3rd quarter.
Biogas retained strong momentum with new units ramping up and
significant price impacts related to energy price increase. Revenue
also includes hydrogen refueling station sales for mobility in
Asia.
Efficiencies amounted to 314 million euros over
the first nine months of the year, a slight increase of
+0.9% compared with 2020, in line with the annual objective
fixed at more than 400 million euros.
Cash flow from operating activities before changes in net
working capital amounted to 3,701 million euros at the
end of September 2021, an increase of +1.4% and of +4.6%
excluding currency impact. This corresponds to a high level of
22.2% of sales and of 23.4% excluding energy impact. When
including changes in working capital, the net cash flows from
operating activities increased by +5.1% and +7.9% excluding
currency impact.
Industrial investment decisions reached 866 million
euros in the 3rd quarter, totaling more than 2.2 billion
euros since the beginning of the year. Development momentum
remained strong within Large Industries, particularly with
the project to invest in a large-scale hydrogen and carbon monoxide
production unit with integrated CO2 recycling. Momentum was also
strong for investment decisions within the Electronics
business with Carrier gases contracts signed in the United States
and in China.
The 12-month portfolio of investment opportunities
increased by more than 200 million euros to reach the very high
total of 3.3 billion euros during the 3rd quarter.
The additional contribution to revenue of unit start-ups
and ramp-ups remained high at 100 million euros during the
3rd quarter of 2021, including the acquisition of 16 air separation
units from Sasol in South Africa. Thus, at the end of September,
this figure amounted to 230 million euros, in line with the
estimated contribution of 320 million euros for 2021.
Analysis of 3rd quarter 2021 revenue
Unless otherwise stated, all variations in revenue outlined
below are on a comparable basis, excluding currency, energy
(natural gas and electricity) and significant scope impacts.
Due to the exceptional impact of the pandemic in the 3rd quarter
of 2020, a comparison with 2019 3rd quarter sales has been
introduced for context in reviewing 3rd quarter 2021 performance.
The comparisons between 2021 and 2019 are calculated by adding
2020 and 2021 comparable effects. They are given as a reference
point and do not constitute an alternative performance measure. The
comparable growths mentioned below are calculated compared to the
same period of 2020 except when 2019 is mentioned.
REVENUE
Revenue (in millions of euros)
Q3 2020
Q3 2021
2021/2020 published
change
2021/2020 comparable
change
Gas & Services
4,777
5,585
+16.9%
+6.5%
Engineering & Construction
60
81
+36.9%
+35.1%
Global Markets & Technologies
143
168
+16.9%
+15.9%
TOTAL REVENUE
4,980
5,834
+17.2%
+7.1%
Revenue by Quarter (in millions of
euros)
Q1 2021
Q2 2021
Q3 2021
Gas & Services
5,103
5,247
5,585
Engineering & Construction
76
93
81
Global Markets & Technologies
155
172
168
TOTAL REVENUE
5,334
5,512
5,834
2021/2020 Group published
change
-0.7%
+12.4%
+17.2%
2021/2020 Group comparable
change
+3.8%
+15.2%
+7.1%
2021/2020 Gas & Services comparable
change
+2.8%
+13.7%
+6.5%
Group
Group revenue for the 3rd quarter of 2021 totaled
5,834 million euros. The momentum in the first half-year
continued this quarter, with sales up +7.1% on a comparable
basis with the 3rd quarter of 2020 and about +6%
compared to the 3rd quarter of 2019. Consolidated sales of
Engineering & Construction grew +35.1% relative
to lower activity level due to the pandemic-induced slowdown in
2020. Global Markets & Technologies continued
double-digit growth: sales increased +15.9% in the 3rd
quarter, buoyed by the strength of the biogas market and equipment
sales for hydrogen mobility. The impact of energy this quarter was
particularly strong at +8.9%, on top of positive currency (+0.5%)
and significant scope (+0.7%) impacts. All in all, the Group
reported a very robust +17.2% growth in as published
revenue.
Gas & Services
3rd quarter 2021 revenue for Gas & Services rose by
+6.5% to 5,585 million euros, confirming the upward
trend recorded in the first half-year, despite a less favorable
basis of comparison. Large Industries sales rose
+3.4%, despite the measures imposed in China to limit energy
consumption at some customer plants. The Industrial Merchant
business recovered further, with sales increasing +7.5% as
gas sales were above 2019 levels and pricing impact accelerated
significantly. Healthcare also recorded a strong
performance: sales rose by +6.2%, despite a very high basis
of comparison in 2020. Electronics posted strong sales
growth of +10.4% in a very dynamic market. As published
revenue for Gas & Services was up +16.9% in the 3rd
quarter, benefiting from a strong energy effect
(+9.3%) and positive currency (+0.4%) and significant scope
(+0.7%) impacts.
Revenue by geography and business
line (in millions of euros)
Q3 2020
Q3 2021
2021/2020 published
change
2021/2020 comparable
change
Americas
1,916
2,144
+11.9%
+8.2%
Europe
1,615
2,038
+26.2%
+5.8%
Asia-Pacific
1,101
1,197
+8.7%
+4.1%
Middle East & Africa
145
206
+42.2%
+10.4%
GAS & SERVICES REVENUE
4,777
5,585
+16.9%
+6.5%
Large Industries
1,212
1,743
+43.9%
+3.4%
Industrial Merchant
2,217
2,384
+7.5%
+7.5%
Healthcare
866
921
+6.3%
+6.2%
Electronics
482
537
+11.5%
+10.4%
Americas
Gas & Services revenue in the Americas totaled 2,144
million euros in the 3rd quarter, an increase of +8.2%.
Large Industries sales rose +7.4% driven by high demand and the
ramp-up of new units. The Industrial Merchant business continued to
recover, with a +7.5% increase in revenue. Electronics sales gained
+6.6% in a thriving market. Lastly, Healthcare grew +14.5% and
remains heavily involved in the fight against Covid-19.
- Revenue for Large Industries rose +7.4% during
the 3rd quarter on strong demand in the Steel, Chemicals and
Refining markets, as well as the contribution of start-ups and
ramp-ups in the United States, Canada and Latin America. Hurricane
Ida had only a limited impact.
- The Industrial Merchant business continued to recover.
Sales grew +7.5% in the 3rd quarter. In the United States,
gas sales were solid, even with supply chain pressures, since it
was critically important to supply hospitals with oxygen in those
states affected by the pandemic. Sales of Hardgoods increased, but
remained under their level in the 3rd quarter 2019. Sales were up
in practically all end markets, but the non-residential
Construction market in the United States remained low. Price
effects increased markedly on a sequential basis, from +3.2% in
the 2nd quarter to +5.0% in the 3rd quarter.
- Healthcare revenue rose +14.5% in the 3rd quarter
on a combination of fast-growing sales of medical oxygen to cope
with Covid-19 needs and the gradual pick-up in the Home Healthcare
and the hospital business. In the United States, medical oxygen
volumes were high, especially in the states hardest hit by the
pandemic this quarter, and business was also strong in proximity
care. Sales increased sharply in Latin America, in both Hospital
care and Home Healthcare, notably oxygen therapy in Brazil and
Argentina, and for the treatment of sleep apnea in Brazil.
- Electronics sales rose +6.6%, fueled by a steep
increase in Carrier gases volumes benefiting from a new unit
ramp-up. Equipment and Installation sales were lower than the high
level recorded in the 3rd quarter of 2020.
Europe
In the 3rd quarter, revenue in Europe rose by +5.8% to
2,038 million euros. Large Industries sales (+7.6%) expanded
on strong demand in the Steel and Chemicals sectors and on
increasing volumes in Refining. Up +7.2%, the Industrial Merchant
business pursued its pick-up in sales across all markets and
countries. Healthcare revenue increased +2.6%, despite exceptional
high sales of ventilators in the 3rd quarter of 2020 to meet
pandemic needs. It benefited from sustained sales of medical oxygen
to hospitals and strong demand in Home Healthcare.
- Large Industries sales rose +7.6% benefiting from
strong demand in the Steel and Chemicals industries. Hydrogen
volumes for Refining were up as activity increased and the new unit
in Kazakhstan ramped up. A start-up of a new unit in Russia also
boosted air gases.
- Industrial Merchant revenue rose +7.2%, lifted by
a dynamic recovery in activity. Sales of liquid gases enjoyed
strong growth in all countries, especially in Italy, Germany and
Iberian Peninsula. Cylinder gas sales, which had proved more
resilient to the pandemic, were also up in all countries. The
recovery was even more pronounced in Eastern Europe, particularly
in Poland, Russia and Turkey, with liquid gas sales growing more
than +25% (excluding the divestiture of activities in Greece). All
major markets are trending upward, primarily Metal Fabrication,
Materials and Energy. Pricing impact improved steadily
sequentially and stood at +2.2% in the 3rd quarter.
- Healthcare posted sales growth of +2.6% on a very
high basis of comparison in the 3rd quarter of 2020 (which included
exceptional ventilator sales related to the pandemic). Growth in
sales of medical oxygen was sustained throughout the region
especially in Russia, which was hit hard by the Covid-19 and where
4 additional air separation units were certified for the supply of
medical oxygen to hospitals. Activity remained robust in the Home
Healthcare business, notably for the treatment of diabetes. Sales
of Specialty Ingredients were particularly buoyant in the 3rd
quarter, especially for the cosmetic and vaccine adjuvant
markets.
Europe
- Air Liquide has signed a long-term
Power Purchase Agreement (PPA) with TotalEnergies, for a total
capacity of 15 megawatts of offshore wind electricity in
Belgium. Following PPA agreements in the United States,
Spain, and the Netherlands, this PPA signed by the Group in Belgium
illustrates Air Liquide's commitment to lead the way in the
energy transition and to lower its carbon footprint, in line
with its Sustainability Objectives.
- Air Liquide is planning to build a
renewable hydrogen production plant by electrolysis in
Oberhausen, Germany. With a total capacity to reach 30
megawatts (MW), a first phase of the project is expected to be
operational by early 2023. What is unique about this project
is that the electrolyzer will be integrated into the existing
local pipeline infrastructure of Air Liquide to supply key
industries and mobility with renewable hydrogen in one of the most
industrialized regions of Germany. To accelerate the implementation
of this project, public funding has been granted by the
German Federal Ministry of Economic Affairs and Energy. This
worldscale electrolyzer will be the first to be built in the
framework of the partnership between Air Liquide and Siemens
Energy.
- Air Liquide and TotalEnergies have joined
forces to decarbonize hydrogen production at TotalEnergies’
platform in Normandy. The project* first stage is to acquire
TotalEnergies’ existing hydrogen production plant and connect it to
Air Liquide’s pipeline system. The next stage will see Air Liquide
invest in a new CO2 capture unit at the production plant purchased
from TotalEnergie. The Group has also announced an investment in an
electrolyzer in the basin. This spending is part of the plan to
develop the world’s first low-carbon hydrogen pipeline
network, which will provide the industrial infrastructure for
the development of hydrogen mobility. An agreement was also signed
with other industries operating in the basin to develop a carbon
capture and storage solution (CCS).
*This project is subject to the legal
requirement to inform and consult with the employee representative
bodies at TotalEnergies-Plateforme Normandie, and to approval by
the competent authorities.
Asia-Pacific
Revenue in Asia-Pacific rose +4.1% in the 3rd quarter to
1,197 million euros. Large Industries revenue declined
(-5.5%) due to the impact of China’s Dual Energy Control and
customer maintenance turnarounds. The upward trend in the
Industrial Merchant business continued with a +8.3% increase in
sales, fueled by strong activity in China and the recovery in the
rest of Asia. Electronics sales were up +10.8% in a very dynamic
market with double-digit growth in sales of Carrier gases and high
revenue generated by Equipment & Installations.
- Large Industries sales fell -5.5% in the 3rd
quarter, impacted by customer maintenance turnarounds in China and
Singapore, and measures imposed in China to limit energy
consumption. Indeed, 5 customers were forced to stop production,
and 3 of these were back to full capacity by mid-October. The
strong demand from Steel customers in Japan partially offset these
impacts.
- Industrial Merchant sales grew +8.3% over the
quarter, driven by strong activity in China and the recovery across
the rest of Asia. In China, the sales increase was supported by
small on-site gas production units and cylinder gas. In the rest of
Asia, revenue was close to 2019 level. High-growth markets are
mainly Metal Fabrication, Materials, Energy and Technology. Pricing
impacts were +0.3% and +0.8% excluding the adverse effect of
helium.
- Electronics revenue increased +10.8%. Sales of
Carrier gases benefited from a dynamic market, the ramp-up of
existing units and start-up of two new plants in China and in
Singapore. Equipment and Installation sales were very strong.
Asia-Pacific
- South Korea is a global leader in
developing a low-carbon hydrogen-based economy and clean transport.
Based on demand from industry and its expertise across the entire
hydrogen value chain, Air Liquide is actively contributing to
the rapid development of low-carbon hydrogen production in South
Korea by partnering with local industry and institutions.
- We recently signed an agreement with SK E&S, a global clean
energy and solutions provider, to supply the world’s largest
hydrogen liquefaction plant with a capacity of 90 tons per
day of liquid hydrogen to serve the mobility
market.
- Air Liquide and LOTTE Chemical have signed a Memorandum of
Understanding (MoU) to co-invest in new hydrogen refueling
stations.
- Air Liquide Korea is also helping to develop the hydrogen
ecosystem through its participation in the two Korean hydrogen
mobility consortiums, HyNet and KOHYGEN, dedicated respectively
to the deployment of hydrogen stations for light commercial
vehicles and HGVs. Air Liquide is the only industrial gas company
participating in both consortiums.
Middle East and Africa
Revenue in the Middle-East and Africa rose +10.4% to
206 million euros in the 3rd quarter. The sales of hydrogen
in Saudi Arabia continue to recover, driven by the customer demand
in the Yanbu basin. The surge in air gas volumes was very
substantial as the 16 Sasol air separation units made their first
contribution (an acquisition finalized in June). These sales were
recognized as part of the significant scope effect, hence excluded
from the comparable growth. In the Industrial Merchant business,
sales continued to rise and are above the levels of the 3rd quarter
of 2019. The Healthcare business stayed very buoyant supplying very
large volumes of medical oxygen in pandemic-hit countries.
Engineering & Construction
Consolidated revenue from Engineering & Construction gained
+35.1% to 81 million euros in the 3rd quarter.
Order intake totaled 300 million euros holding to the
positive trend seen in the first half-year. The bulk of the
projects are in Asia with several oxygen production plants, as well
as Electronics or hydrogen production projects. Group orders
accounted for about two-thirds of the total.
Global Markets & Technologies
Global Markets & Technologies posted a +15.9%
increase in sales to 168 million euros in the 3rd quarter.
Biogas retained strong momentum with new units ramping up and
significant price impacts related to energy price increase. Revenue
also includes hydrogen refueling station sales for mobility in
Asia.
Order intake for Group projects and third-party customers
totaled 185 million euros, up +80% compared with 2020. These
are mainly new Turbo-Brayton LNG reliquefaction projects and
hydrogen refueling stations.
Global Markets &
Technologies
- Airbus, Air Liquide and VINCI Airports
are working together to develop the use of hydrogen at
airports and build the European airport network to accommodate
future hydrogen aircrafts. The airport of Lyon-Saint Exupéry
(France) will host the first installations as early as 2023.
This partnership reflects the three groups’ shared ambition to
combine their respective expertise to support the
decarbonization of air travel.
- From 2023: deployment of a gaseous hydrogen distribution
station at Lyon-Saint Exupéry airport. This station will supply
both land vehicles (runway buses, trucks, handling equipment, etc.)
at the airport and those of its partners, but also trucks
circulating in the vicinity
- Between 2023 and 2030: deployment of liquid hydrogen
infrastructure that will allow hydrogen to be loaded into the tanks
of future aircraft.
- Air Liquide and Faurecia announced the
signature of a joint development agreement to design and
produce on-board liquid hydrogen storage systems for the
automotive industry. Through this technology partnership,
the two companies will accelerate the deployment of zero-emission
heavy-duty mobility. The partnership will leverage the companies’
complementary competencies from their respective core businesses
which will be fundamental to accelerate the technology’s
time-to-market.
- Air Liquide will bring its recognized expertise across
the entire liquid hydrogen value chain, including extreme
cryogenics, storage technologies, recharging interfaces and its
infrastructure knowledge.
- Faurecia will bring its expertise in
architectures and systems integration, its recognized
competencies in testing and simulation, its know-how and its
presence in the global automotive industry, as well as its
privileged relationships with vehicles manufacturers.
INVESTMENT CYCLE
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
Industrial and financial investment decisions reached the
high level of 873 million euros in the 3rd quarter of 2021.
They account for 2.8 billion euros year to date including
the acquisition of Sasol’s 16 Air Separation Units in South Africa,
compared to 2.1 billion at the end of September 2020.
Industrial investment decisions reached 866 million
euros in the 3rd quarter, totaling more than 2.2 billion
euros since the beginning of the year. Development momentum
remained strong within Large Industries, particularly with
the project to invest in a large-scale hydrogen and carbon monoxide
production unit with integrated CO2 recycling. Momentum was also
strong for investment decisions within the Electronics
business with Carrier gases contracts signed in the United States
and in China.
Financial investment decisions totaled 7 million
euros for the quarter, corresponding mainly to three small
acquisitions in the Industrial Merchant business in China.
The investment backlog remained high at 3.1 billion
euros, evenly distributed across various business sectors and
geographies. The Chemicals market represented around one third of
the investment backlog, the Electronics market around one quarter,
and the Steel market just over 15%. Investment backlog in the Oil
& Gas market remained limited at 6% of the total. The future
contribution to annual revenue after full ramp-up of the units
is expected to be 1.1 billion euros.
Investment
- Air Liquide, TotalEnergies and VINCI,
have combined forces with other large international companies to
sponsor the creation of the world’s largest fund exclusively
dedicated to clean hydrogen infrastructure solutions. The first
commitments have already reached 800 million euros, on a target of
1.5 billion. With the announced support of public policies and the
use of debt financing, the fund should be able to participate in
the development of hydrogen projects for a total amount of around
15 billion euros.
START-UPS
In Large Industries, two large-scale air separation units
were commissioned during the 3rd quarter of 2021 in Russia and the
United States. Moreover, from the 3rd quarter, the
Electronics business supplied all the Carrier gases to a
customer site in China and to a Semiconductor megafab in
Singapore.
The additional contribution to revenue of unit start-ups
and ramp-ups remained high at 100 million euros during the
3rd quarter of 2021, including the acquisition of 16 air separation
units from Sasol in South Africa. Thus, at the end of September,
this figure amounted to 230 million euros, in line with the
estimated contribution of 320 million euros for 2021.
INVESTMENT OPPORTUNITIES
The 12-month portfolio of investment opportunities
increased by more than 200 million euros to reach the very high
total of 3.3 billion euros during the 3rd quarter.
Energy transition projects represented 42% of the
portfolio of opportunities. These notably included projects for
hydrogen production by electrolysis, hydrogen liquefaction and
carbon capture and storage (“CCS”). The share from the
Electronics business also remained high.
Europe accounted for more than one third of
opportunities, owing to the numerous projects linked to the
energy transition, followed by Asia with
opportunities in Electronics. Then came the Americas,
which had opportunities in Electronics and Large
Industries, followed by the Middle-East &
Africa.
Operating Performance
Efficiencies amounted to 314 million euros over
the first nine months of the year, a slight increase of
+0.9% compared with 2020, in line with the annual objective
fixed at more than 400 million euros. These efficiencies represent
cost savings of 2.9%, to be compared with 2.6% in 2020.
Industrial efficiencies accounted for a little more than 50%
of total efficiencies and were, in particular, the result of
supply chain optimization projects in the Industrial
Merchant and Healthcare business lines, and of energy
efficiency improvements and maintenance operation
optimizations in Large Industries. The implementation of
digital tools aimed at the Group’s transformation
continued, with, in particular, the acceleration of the roll-out of
remote operation centers for Large Industries production units
(Smart Innovative Operations, SIO) and new optimization tools for
delivery routes in Industrial Merchant (Integrated Bulk Operations,
IBO). The shared service centers are developing and
efficiencies related to procurement are being pursued.
Cash flow from operating activities before changes in net
working capital amounted to 3,701 million euros at the
end of September 2021, an increase of +1.4% and of +4.6%
excluding currency impact. This corresponds to a high level of
22.2% of sales and of 23.4% excluding energy impact. When
including changes in working capital, the net cash flows from
operating activities increased by +5.1% and +7.9% excluding
currency impact.
At the end of September 2021, gross industrial capital
expenditure amounted to 2,180 million euros, an increase
of +12.8% compared with 2020. They represented 13.1% of
sales.
Portfolio management was very active during the first 9 months
of the year, particularly with the acquisition of 16 air
separation units from Sasol in South Africa. The Group also
finalized 5 divestitures, including its activities in Greece, and
carried out several small acquisitions in the Healthcare and
Industrial Merchant business lines in North America, Europe and
Asia.
Net debt totaled 11,552 million euros, a strong decrease
compared with 12,013 million euros at June 30, 2021, benefiting
mainly from high cash flow from operating activities. The net
debt-to-equity ratio, adjusted for the seasonal effect of the
dividend payment, reached 53.6%, representing a decrease
compared with December 31,2020 (55.8%).
Outlook
The third quarter confirms the continued sales growth observed
in the first half-year. All activities are increasing: Gas &
Services in all regions of the world, Engineering &
Construction and Global Markets & Technologies, in a
more favorable market environment.
Revenue in the third quarter amounted to 5.8 billion euros, i.e.
+17.2% as published and +7.1% in comparable terms. This
good performance illustrates Group’s strong positioning on its
markets and the robustness of its business model, in the
context of a strong surge in energy prices.
Within Gas & Services, which accounts for 96% of
sales, activity is particularly supported by the momentum of the
Electronics industry, the continued recovery of the
Industrial Merchant business and the robustness of
Healthcare activities. Mobilization of teams continued
this quarter in fighting the pandemic in several regions of the
world, particularly in the supply of medical oxygen.
Geographically, activity levels are particularly strong in the
Americas and Europe, and more contrasted in Asia.
The Group continues its momentum of improving its operating
margin, driven by operational efficiencies of 314 million
euros over the first nine months, in line with the annual
target of more than 400 million euros, and active price
management taking into account the inflationary context.
Cash flow remains high above 23% of sales excluding
energy impact.
12-month investment opportunities are increasing, now
reaching 3.3 billion euros, with more than 40% related to the
energy transition. In this context, the Group approved
investments of nearly 900 million euros this quarter,
notably in Large Industries and Electronics. One third of
industrial investment decisions will contribute to the energy
transition. The robust and diversified investment
backlog, currently running at 3.1 billion euros, is
particularly promising for future growth.
True to its growth model combining financial performance and
societal performance, Air Liquide has multiple
initiatives this quarter to promote hydrogen as a key
solution to fight global warming.
In 2021, Air Liquide is confident in its ability to further
increase its operating margin and to deliver recurring net profit1
growth at constant exchange rates.
3Excluding exceptional and significant items that have no impact
on the operating income recurring. Excluding the impact of a
possible US tax reform in 2021
Appendices - Performance indicators
Performance indicators used by the Group that are not directly
defined in the financial statements have been prepared in
accordance with the AMF position 2015-12 about alternative
performance measures.
The performance indicators are the following:
- Currency, energy and significant scope impacts
- Comparable sales change
- Efficiencies
Definition of Currency, energy and significant scope
impacts
Since industrial and medical gases are rarely exported, the
impact of currency fluctuations on activity levels and results is
limited to euro translation impacts with respect to the financial
statements of subsidiaries located outside the euro zone. The
currency effect is calculated based on the aggregates for the
period converted at the exchange rate for the previous period.
In addition, the Group passes on variations in the cost of
energy (electricity and natural gas) to its customers via indexed
invoicing integrated into their medium and long-term contracts.
This indexing can lead to significant variations in sales (mainly
in the Large Industries Business Line) from one period to another
depending on fluctuations in prices on the energy market.
An energy impact is calculated based on the sales of each
of the main subsidiaries in Large Industries. Their consolidation
allows the determination of the energy impact for the Group as a
whole. The foreign exchange rate used is the average annual
exchange rate for the year N-1. Thus, at the subsidiary level, the
following formula provides the energy impact, calculated for
natural gas and electricity respectively:
Energy impact = Share of sales indexed to energy year (N-1) x
(Average energy price in year (N) - Average energy price in year
(N-1))
This indexation effect of electricity and natural gas does not
impact the operating income recurring.
The significant scope effect corresponds to the impact on
sales of all acquisitions or disposals of a significant size for
the Group. These changes in scope of consolidation are
determined:
- for acquisitions during the period, by deducting from the
aggregates for the period the contribution of the acquisition,
- for acquisitions during the previous period, by deducting from
the aggregates for the period the contribution of the acquisition
between January 1 of the current period and the anniversary date of
the acquisition,
- for disposals during the period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity as of the anniversary date of the disposal,
- for disposals during the previous period, by deducting from the
aggregates for the previous period the contribution of the disposed
entity.
Comparable sales change
Comparable changes for sales excludes the currency, energy
and significant scope impacts described above.
For the 3rd quarter 2021 the calculations are the following:
(in millions of euros)
Q3 2021
Q3 2021/2020 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q3 2021/2020 Comparable
Growth
Revenue
Group
5,834
+17.2%
24
342
99
34
+7.1%
Impacts in %
+0.5%
+6.9%
+2.0%
+0.7%
Gas & Services
5,585
+16.9%
22
342
99
34
+6.5%
Impacts in %
+0.4%
+7.2%
+2.1%
+0.7%
(in millions of euros)
YTD 2021
YTD 2021/2020 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant s cope
impact
YTD 2021/2020 Comparable
Growth
Revenue
Group
16,680
+9.4%
(474)
646
213
(237)
+8.5%
Impacts in %
-3.1%
+4.3%
+1.4%
-1.7%
Gas & Services
15,935
+8.4%
(464)
646
213
(237)
+7.5%
Impacts in %
-3.2%
+4.4%
+1.5%
-1.8%
Efficiencies
Efficiencies represent a sustainable cost reduction
resulting from an action plan on a specific project. Efficiencies
are identified and managed on a per project basis. Each project is
followed by a team composed in alignment with the nature of the
project (purchasing, operations, human resources...).
Year to date revenue
By Geography
Revenue
(in millions of euros)
YTD 2020
YTD 2021
YTD Published
change
YTD Comparable
change
Americas
5,891
6,203
+5.3%
+7.6%
Europe
5,055
5,695
+12.6%
+6.9%
Asia-Pacific
3,337
3,523
+5.6%
+7.1%
Middle East & Africa
414
514
+24.5%
+15.9%
GAS & SERVICES REVENUE
14,697
15,935
+8.4%
+7.5%
Engineering & Construction
164
250
+52.8%
+54.7%
Global Markets & Technologies
392
495
+26.2%
+27.9%
GROUP REVENUE
15,253
16,680
+9.4%
+8.5%
By Business Line
Revenue
(in millions of euros)
YTD 2020
YTD 2021
YTD Published
change
YTD Comparable
change
Large Industries
3,642
4,659
+27.9%
+6.0%
Industrial Merchant
6,726
6,979
+3.7%
+8.2%
Healthcare
2,825
2,756
-2.5%
+8.3%
Electronics
1,504
1,541
+2.5%
+6.6%
GAS & SERVICES REVENUE
14,697
15,935
+8.4%
+7.5%
The slideshow that accompanies this release is available as
of 9:00 am (Paris time) at www.airliquide.com.
Throughout the year, follow Air Liquide on
Twitter: @AirLiquideGroup.
UPCOMING EVENTS
2021 Full Year results: February 16, 2022
Capital Markets Day: March 22, 2022
A world leader in gases, technologies and
services for Industry and Health, Air Liquide is present in 78
countries with approximately 64,500 employees and serves more than
3.8 million customers and patients. Oxygen, nitrogen and hydrogen
are essential small molecules for life, matter and energy. They
embody Air Liquide’s scientific territory and have been at the core
of the company’s activities since its creation in 1902.
Air Liquide’s ambition is to be a leader
in its industry, deliver long term performance and contribute to
sustainability - with a strong commitment to climate change and
energy transition at the heart of its strategy. The company’s
customer-centric transformation strategy aims at profitable,
regular and responsible growth over the long term. It relies on
operational excellence, selective investments, open innovation and
a network organization implemented by the Group worldwide. Through
the commitment and inventiveness of its people, Air Liquide
leverages energy and environment transition, changes in healthcare
and digitization, and delivers greater value to all its
stakeholders.
Air Liquide’s revenue amounted to more
than 20 billion euros in 2020. Air Liquide is listed on the
Euronext Paris stock exchange (compartment A) and belongs to the
CAC 40, EURO STOXX 50 and FTSE4Good indexes.
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