Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of
euros)
FY 2023
2023/2022 as published
2023/2022
comparable(a)
Group Revenue
27,608
-7.8%
+3.7%
of which Gas & Services
26,360
-7.7%
+4.2%
Operating Income Recurring
(OIR)
5,068
+4.2%
+11.4%
Group OIR Margin
18.4%
+220 bps
Variation excluding energy(b)
+80 bps
Gas & Services OIR Margin
20.0%
+230 bps
Variation excluding energy(b)
+70 bps
Net Profit (Group Share)
3,078
+11.6%
Net Profit Recurring (Group Share)(c)
3,320
+5.0%
Earnings per Share (in euros)
5.90
+11.7%
2023 proposed Dividend per Share (in
euros)
3.20
+8.5%
Cash flow from operating activities before
changes in working capital
6,357
+1.6%
Net Debt
€9.2 bn
Return on Capital Employed after tax -
ROCE
9.8%
+70 bps
Recurring ROCE(d)
10.6%
+30 bps
(a) Change excluding the currency, energy (natural gas and
electricity) and significant scope impacts, see reconciliation in
the appendices. (b) See reconciliation in the appendices. (c)
Excluding exceptional and significant transactions that have no
impact on the operating income recurring, see reconciliation in the
appendices. (d) Based on the recurring net profit, see
reconciliation in appendix.
Commenting on 2023 results, François Jackow, Chief Executive
Officer of the Air Liquide Group, stated:
“In 2023, Air Liquide achieved a solid performance,
highlighting the resilience and quality of our business
model as well as the mobilization and agility of our
teams in a complex and changing macroeconomic and geopolitical
environment. The Group’s performance was characterized by an
increase in sales on a comparable basis, a further
improvement in its operating margin excluding the energy impact
and an accelerating investment momentum, particularly in
decarbonization projects.
In particular, I am proud to highlight that we have practically
reached, in two years, the margin ambition targeted for 2025
as part of our ADVANCE strategic plan. As a consequence, we
announce today that we are doubling our initial ambition.
We also confirm our other ADVANCE financial objectives, sales
growth on a comparable basis and Return on Capital Employed, as
well as our investment decision ambition. In addition, on the
extra-financial level, our many decarbonization initiatives give us
confidence in our objective to combine growth in our business with
a reduction in our CO2 emissions in absolute value from 2025.
Revenue reached 27.61 billion euros, an increase of +3.7% on
a comparable basis in 2023. On a published basis, it stood at
-7.8%, due to the drop in energy prices - for which variations are
contractually passed through to Large Industries customers - as
well as negative currency impacts. The Gas & Services
business, which represented 95% of the Group’s revenue, was up
+4.2% on a comparable basis. Within this activity, all regions
saw growth, in particular the Americas and
Europe, driven notably by Industrial Merchant and
Healthcare.
In line with its ADVANCE strategic plan, Air Liquide
continued to improve its operational performance. The Group
generated record efficiencies of 466 million euros, up +23%
despite an inflationary context unfavorable to savings on
procurement, and continued the dynamic management of its business
portfolio. Its ability to provide its customers with value-added
offerings allows it to adjust its prices in Industrial Merchant. As
a result, the operating margin increased further, by +80
basis points in 2023 excluding the energy impact, and therefore
by +150 basis points over 2022-2023. Having practically
reached our margin target halfway through ADVANCE which was at +160
basis points, we now aim for a +320 basis points increase, twice
our initial ambition, over the duration of the plan.
Net profit (Group share) amounted to 3.08 billion euros, up
+11.6% as published. Net profit recurring(1) increased
by +13.3% excluding the currency impact. Cash flow(2)
grew by +12.8% excluding the currency impact. The balance sheet is
strong with a net debt to equity ratio of 36.8%. At 10.6% at
end-December, recurring ROCE(3) remained well above 10%, in
line with the objectives of ADVANCE, despite the increase in our
investments. Reflecting our confidence in the future, the dividend
that will be submitted to the shareholders’ vote in April amounts
to 3.20 euros per share, i.e. an increase of +8.5%.
In addition, a free share attribution is scheduled for June
2024, on the basis of one share for every 10 shares held.
The investment dynamic of the Group is accelerating,
supported in particular by our projects in the energy transition
and electronics. The backlog is historically high at 4.4 billion
euros. Investment decisions reached a record level of 4.3
billion euros in 2023.
In 2024, Air Liquide is confident in its ability to further
increase its operating margin and to deliver growth in Net profit
recurring, at constant exchange rates(4)."
Highlights
- Corporate
- Air Liquide, Official Supporter in
hydrogen of the Paris 2024 Olympic and Paralympic Games
to contribute to reducing the event’s carbon emissions. The Group
will supply hydrogen from renewable sources to power some of the
vehicles in the official fleet of Paris 2024 and will contribute to
the acceleration of the development of long-lasting infrastructures
for hydrogen mobility (taxi fleets, refueling stations).
- Early bond redemption, for a total of
382 million US dollars, at the end of a Tender Offer
process for two series of US dollar bonds maturing in 2026 for the
first and 2046 for the second.
- Asset portfolio management
- Divestiture of Air Liquide’s 19% stake
in Hydrogenics Corporation to Cummins, which owns the remaining
81% of the company.
- Signing of an agreement with Safran
Aerosystems for the sale of Air Liquide’s oxygen and nitrogen
aeronautical technology businesses, excluding marine-related
cryogenic businesses.
- Realization of the Trinidad and Tobago
business divestiture to Massy Gas Products Holding Ltd.
- Healthcare
- Business transformation project for
Home Healthcare in France to align it with the needs and
expectations of patients and healthcare professionals and adapt its
business model to meet the challenges of the country's health
system.
- Electronics
- Announcement of an investment of close
to 200 million US dollars in two new advanced material
production centers in Taiwan and South Korea.
- Sustainable development
- Announcement by Air Liquide and
Sasol of new long-term contracts (PPA) for supplying
renewable energy to the Sasol site in Secunda, South Africa. In
2022 and 2023, the two groups announced 580 MW in capacity.
- Signature by Air Liquide of its first
long-term renewable electricity supply contract (PPA) in China,
which gives the Group access to an installed capacity of 200
MW.
- Signature with the energy company
Vattenfall of a long-term renewable electricity purchase
agreement (PPA) in the Benelux for an installed offshore wind
capacity of approximately 115 MW.
- Inclusion in the Dow Jones
Sustainability Europe Index, an index established by S&P
Global that assesses the progress of companies in terms of
sustainable development.
- Hydrogen
- Announcement of an investment of more
than 400 million euros for the construction of the Air
Liquide Normand'Hy electrolyzer. In the framework of the
Important Project of Common European Interest (IPCEI) approved by
the European Commission, the project received the support of the
French State for an amount of 190 million euros, as part of the
“Plan de Relance”.
- Inauguration of the Air Liquide and
Siemens Energy electrolyzer gigafactory, which paves the way
for the production of renewable hydrogen on an industrial scale at
a competitive cost. This plant will count the Air Liquide
Normand'Hy project among its first customers.
- Air Liquide is a member of a record
number of six of the seven renewable and low-carbon Hydrogen
Hubs selected in October for financial support by the
U.S. government.
- Creation with Groupe ADP of "Hydrogen
Airport", the first engineering and consulting joint venture
specialized in accompanying airports in their projects to integrate
hydrogen in their infrastructure.
- Launch of TEAL Mobility, a 50/50 joint
venture with TotalEnergies, to develop a network of more
than 100 hydrogen distribution stations for trucks on major
European highways.
- Signature with the Japanese energy giant
ENEOS Corporation of a Memorandum of Understanding (MoU) to
accelerate the development of low-carbon hydrogen and the energy
transition in Japan.
- Selection of Air Liquide’s autothermal
reforming (ATR) technology for a project owned and operated by
INPEX CORPORATION, for the large-scale production of hydrogen
and low-carbon ammonia, a first in Japan.
- Development with KBR of a low-carbon
ammonia and hydrogen production solutions offering based on Air
Liquide’s Autothermal Reforming (ATR) technology. In addition,
a project for an innovative industrial-scale ammonia cracking
pilot plant in the port of Antwerp, Belgium.
- Decarbonizing industry
- Announcement of the construction of a
large-scale CryocapTM CO2 capture unit, which will be
installed at the Air Liquide hydrogen production plant located in
the port of Rotterdam. This unit will be connected to Porthos,
one of the largest carbon capture and storage infrastructures in
Europe which aims at reducing emissions from this major
industrial area.
- Investment of 140 million euros to
build and operate an Air Separation Unit (ASU) in Quebec, Canada,
to support the growth of the electric vehicle battery sector.
This ASU will be powered by renewable electricity.
- Investment of around 60 million
euros to transform two Air Separation Units (ASU) operated
by Air Liquide in the Tianjin industrial area, China, as
part of the renewal of a long-term contract with YLC, a
subsidiary of the Bohua group. The electrification of these two
ASUs will enable CO2 emissions to be reduced by 370,000 metric
tonnes each year.
- Signature with Holcim of a memorandum of
understanding concerning a decarbonization project for the new
Holcim cement plant under development in Belgium. Using
Air Liquide's innovative and proprietary CryocapTM technology, this
project would enable Holcim to reduce this cement plant's CO2
emissions by 1.1 million metric tonnes per year.
- Decarbonization and reduction of
energy consumption: implementation of an innovative
solution to support the conversion of the Verallia plant in
Pescia, Italy to optimized oxycombustion on the
occasion of the construction of a new glass furnace on the
site.
- Record number of signatures for 62 new
small gas production units directly installed on customers'
sites in the industrial merchant and electronics sectors in
2023.
Financial performance
Group revenue for 2023 totaled 27,608 million
euros, posting comparable growth of +3.7% over 2022. The
Group’s revenue as published was down -7.8%, impacted
by unfavorable energy (-7.6%) and currency (-4.2%) impacts, the
significant perimeter impact being slightly positive at +0.3%.
Gas & Services revenue totaled 26,360 million
euros in 2023, an increase on a comparable basis of
+4.2%. Revenue as published in the Gas & Services
business was down -7.7%, penalized by negative energy
(-8.0%) and currency (-4.2%) impacts, while the significant scope
effect was slightly positive at +0.3%.
The two growth(5) drivers for 2023 were the Industrial
Merchant business, with sales up +8.5%, benefiting from
a price impact that remained high (+8.4%) and
resilient volumes, and the Healthcare business
(+8.4%), bolstered by the dynamic development of Home
Healthcare and the increase in the prices of medical gases in an
inflationary environment. Revenue from Large Industries was
down -1.8% over the year, demand stabilized at a relatively
low level. Sales in Electronics increased by +2.4% in
2023, following growth of +16% in 2022, the sharp drop in demand
from memory manufacturers having impacted sales from the 2nd
quarter.
- Gas & Services revenue in the Americas totaled
10,169 million euros in 2023, up by +5.1%. Large
Industries sales (-2.2%) were impacted by customer turnarounds and
relatively low demand. The Industrial Merchant business posted
strong growth of +6.7%, boosted by a high price impact (+6.3%) and
slightly positive volumes. In Healthcare, the rise in prices in
proximity care in the United States and the dynamism of the
business in South America contributed to the strong increase in
sales (+14.2%). Electronics revenue was down by -2.8% in a context
of slowing demand from memory manufacturers impacting sales of
materials.
- Gas & Services revenue in Europe was up +4.2%
in 2023 and totaled 9,734 million euros. Large Industries
sales were slightly down (-0.9%) in a context of weak demand from
customers in the Chemicals and Steel industries. Revenue from the
Industrial Merchant business rose sharply, by +12.3%, driven by a
price impact of +14.0% and resilient volumes excluding helium and
liquefied CO2. Healthcare sales increased by +5.8%, benefiting from
the dynamism of Home Healthcare and the increase in medical gas
prices in an inflationary context.
- Gas & Services revenue for the Asia Pacific region
in 2023 rose by +1.8%, to total 5,410 million euros.
The Large Industries business (-5.5%) was impacted by weak demand
and customer turnarounds. Sales in the Industrial Merchant business
were up sharply, by +9.9%, driven by a high price impact at +7.3%
and by an increase in volumes, in China in particular. Growth in
Electronics was +2.2% over the year: very dynamic in 1st quarter,
it was then impacted by lower demand from memory manufacturers and
a very high basis of comparison in 2022.
- Gas & Services revenue in the Middle East &
Africa region increased by +7.0% to 1,047 million
euros in 2023. All business lines grew.
Global Markets & Technologies revenue for 2023 was
down by -1.0% compared to 2022, at 858 million euros.
Organic growth reached +9.7%, excluding the
divestitures carried out at the end of 2022. Order intake
for Group projects and third-party customers amounted to 926
million euros, up +5.8% compared to 2022.
Consolidated revenue from Engineering & Construction
totaled 390 million euros in 2023, down by -15.6%.
Consolidated revenue excludes activities carried out as part of
internal projects for Large Industries and Electronics, which are
growing. Order intake amounted to 1,511 million euros
for Group projects and third-party customers and hence
exceeded 1 billion euros for the third consecutive year.
The Group's operating income recurring (OIR)
reached 5,068 million euros in 2023, an increase of +4.2% as
published. It increased by +11.4% on a comparable basis,
which is significantly higher than the comparable sales growth of
+3.7%, highlighting a strong leverage effect. This performance
reflects the progress of the action plan deployed around 3 levers:
efficiencies, pricing management in particular in Industrial
Merchant and a dynamic asset portfolio management. Hence, the
efficiencies(6) amounted to 466 million euros in
2023, a sharp increase of +23.2% compared with 2022 and
significantly above the annual target of 400 million euros.
Excluding the energy impact, the operating margin improved
very significantly by +80 basis points. Thus, the sum of
improvements in the operating margin excluding energy impact in
2022 and 2023 reached +150 basis points and compares
to the +160 basis points expected over the 4-year period of the
ADVANCE plan. Consequently, the ambition for improvement in the
margin excluding the energy impact of the ADVANCE strategic
plan is raised to +320 basis points over 4 years, which
reflects an acceleration. This corresponds to twice the
improvement initially planned. Hence, +170 basis points of
improvement are expected for the remaining 2 years of the ADVANCE
plan.
Net profit (Group share) reached 3,078
million euros in 2023, showing strong growth of
+11.6% as published and an increase of +21.0% excluding the
currency impact. It exceeded 3 billion euros for the first
time. Net profit recurring (Group share)(7) amounted to
3,320 million euros, up by +5.0%, and +13.3%
excluding currency impact.
Net earnings per share, stood at 5.90 euros and
were up +11.7% as published compared with 2022, in line with
the increase in net profit (Group share).
Net cash flow from operating activities after changes in
working capital requirement amounted to 6,263 million
euros, a strong increase of +7.8% compared with 2022 and
+12.8% excluding the currency impact.
Net debt at December 31, 2023, amounted to 9,221
million euros, a decrease of 1,040 million euros
compared with December 31, 2022. Indeed, cash flows from operating
activities allowed to reduce the net debt after the payment of over
3.4 billion euros in industrial investments and 1.6 billion euros
in dividends.
The return on capital employed after tax (ROCE) was 9.8% in
2023. The recurring ROCE(7) stood at 10.6 %,
an improvement compared to 10.3% in 2022 and aligned with the
ADVANCE strategic plan's double-digit objective.
Industrial and financial investment decisions reached a
high level of 4.3 billion euros in 2023, up
sharply from 4.0 billion euros in 2022. The investment
backlog hit a record high of 4.4 billion euros in 2023,
a sharp increase from 3.5 billion euros in 2022.
At the General Meeting on April 30, 2024, the payment of a
dividend of 3.20 euros per share will be proposed to
shareholders for the 2023 fiscal year, representing an increase of
+8.5% compared with the previous year. The ex-dividend
date has been set for May 20, 2024, and the
payment is scheduled for May 22, 2024. Moreover, a
free share attribution, on the basis of one free share for
every 10 shares held, as well as the application of a loyalty
bonus, are planned for June 2024.
Extra-financial performance
The Group's scopes 1 and 2 CO2 emissions in 2023 totaled
37.6 million tonnes of CO2 equivalent(8). They were
down -4.7% compared with 2022 and -4.9% compared with the
2020 baseline.
The Group announced in 2023 the signature of long-term power
purchase agreements (PPAs), for more than 1.5 TWh per
year aiming to reduce its annual emissions of CO2 by around
-1.2 million tonnes. Moreover the Group pursues carbon capture
and energy efficiency project development.
With these achievements, Air Liquide is confident to accomplish
its ADVANCE near term goal of CO2 emissions inflection in
2025.
On the social aspect, safety is a priority. The lost-time
accident frequency rate(9) stood at 1.0 in 2023. The
share of employees benefitting from a common basis of care
coverage reached 78%, showing a sharp increase compared
to 34% in 2021, in line with the objective of 100% by 2025.
Finally, the Access Oxygen program pursues its development.
Over 2 million people have been facilitated with access to
medical oxygen in low and moderate income countries,
a +16% increase compared to 2022.
Governance
On the recommendation of the Appointments and Governance
Committee, the Board of Directors also approved the draft
resolutions which will be submitted to the General Meeting of April
30, 2024 in order to renew for a period of four years, the term
of office of two Directors:
- Ms Kim Ann Mink, an American national, who has been a
Director on the Board of Directors since May 2020 and a member of
the Remuneration Committee since September 2021. Having spent most
of her career in major international groups in the chemicals
industry, where she held various management positions, Ms Kim Ann
Mink brings her experience in the fields of research and innovation
and her managerial skills to the Board of Directors, in addition to
her scientific expertise.
- Ms Monica de Virgiliis, a French-Italian national, who
has been a Director on the Board of Directors since February 15,
2023, following her provisional appointment by the Board of
Directors (ratified by the General Meeting of May 3, 2023),
replacing Ms Anette Bronder for the remainder of her term of
office, i.e. until the end of the General Meeting of April 30,
2024. She has also been a member of the Environment and Society
Committee since May 2023. Ms Monica de Virgiliis brings to the
Board of Directors her experience of more than 15 years in the
Electronics business, her skills in the field of technology and
energy, her managerial skills and her commitment to energy
transition.
The Board of Directors has qualified Ms. Kim Ann Mink and Ms.
Monica de Virgiliis as independent Directors.
During its plenary meeting of November 9, 2023, the European
Works Council renewed the term of office as Director representing
the employees of Ms Fatima Tighlaline, (which expires at the end of
the General Meeting of April, 30, 2024) for a period of four years
expiring at the end of the 2028 General Meeting, which will approve
the financial statements for the 2027 fiscal year.
At the end of the General Meeting, subject to approval by the
Meeting of all the resolutions proposed, the Board of Directors
composition would therefore remain unchanged at 14
members: 12 members appointed by the General Meeting, most of
whom are independent (i.e. 83% independent Directors), including 5
women (i.e. 42%), 5 foreign nationals (i.e. 42%) and 2 Directors
representing the employees.
Finally, the Board of Directors will submit to the vote of the
General Meeting the elements of remuneration of Mr François Jackow,
Chief Executive Officer, and of Mr Benoît Potier, Chairman of the
Board of Directors, together with the information relating to the
remuneration of all the corporate officers for 2023. The General
Meeting will also be invited to decide upon the remuneration policy
for the corporate officers which will apply to Mr. François Jackow,
Chief Executive Officer, to Mr Benoît Potier, Chairman of the Board
of Directors and to the Directors.
Air Liquide’s Board of Directors, which met on February 19,
2024, approved the audited financial statements for the 2023 fiscal
year. The Statutory Auditors are in the process of issuing a report
with an unqualified opinion.
Table of Contents
PERFORMANCE 8
Key Figures 8 Income Statement 9 Cash Flow
and Balance Sheet 19 Extra-financial performance 21
INVESTMENT CYCLE AND FINANCING 23
Investments 23 Financing 25
OUTLOOK 27
APPENDICES 28
Performance indicators 28 Calculation of
performance indicators (Year) 30 Calculation of performance
indicators (Quarter) 34 Definitions 35 Geographic and segment
information 36 Consolidated income statement 36 Consolidated
balance sheet 37 Consolidated cash flow statement 38 Sales,
Operating Income Recurring and investments key figures synthesis
40
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)
FY 2022
FY 2023
2023/2022 published
change
2023/2022 comparable
change(a)
Total Revenue
29,934
27,608
-7.8%
+3.7%
Of which Gas & Services
28,573
26,360
-7.7%
+4.2%
Operating Income Recurring (OIR)
4,862
5,068
+4.2%
+11.4%
Group OIR Margin
16.2%
18.4%
+220 bps
Variation excluding energy impact(b)
+80 bps
Other Non-Recurring Operating Income and
Expenses
(571)
(497)
Net Profit (Group Share)
2,759
3,078
+11.6%
Net Profit Recurring (Group share)(c)
3,162
3,320
+5.0%
Variation excluding currency impact
+13.3%
Net earnings per share (in
euros)
5.28
5.90
+11.7%
Dividend per Share (in euros)
2.95
3.20(d)
+8.5%
Cash flow from operating activities before
changes in working capital
6,255
6,357
+1.6%
Net cash flows from operating
activities
5,810
6,263
+7.8%
Variation excluding currency impact
+12.8%
Industrial capital expenditure
3,273
3,393
+3.7%
Net Debt
€10.3 bn
€9.2 bn
Net Debt to Equity ratio
41.8%
36.8%
Return on Capital Employed after tax -
ROCE
9.1%
9.8%
+70 bps
Recurring ROCE(e)
10.3%
10.6%
+30 bps
(a) Change excluding the currency, energy (natural gas and
electricity) and significant scope impacts, see reconciliation in
the appendices (b) See reconciliation in the appendices. (c)
Excluding exceptional and significant transactions that have no
impact on the operating income recurring, see reconciliation in the
appendices. (d) Dividend proposed to shareholders for the fiscal
year 2023. (e) Based on the recurring net profit, see
reconciliation in the appendices.
Income Statement
REVENUE
Revenue
(in millions of euros)
FY 2022
FY 2023
2023/2022 published
change
2023/2022 comparable
change
Gas & Services
28,573
26,360
-7.7%
+4.2%
Engineering & Construction
474
390
-17.7%
-15.6%
Global Markets & Technologies
887
858
-3.3%
-1.0%
TOTAL REVENUE
29,934
27,608
-7.8%
+3.7%
Revenue by Quarter
(in millions of euros)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Gas & Services
6,893
6,512
6,483
6,472
Engineering & Construction
87
93
110
100
Global Markets & Technologies
194
201
218
245
TOTAL REVENUE
7,174
6,806
6,811
6,817
2023/2022 Group published
change
+4.2%
-7.0%
-17.4%
-8.9%
2023/2022 Group comparable
change
+6.2%
+3.8%
+1.5%
+3.7%
2023/2022 Gas & Services comparable
change
+6.7%
+4.1%
+1.7%
+4.6%
Group
Group revenue for 2023 totaled 27,608 million
euros, posting comparable growth of +3.7% over 2022.
Sales in the Global Markets & Technologies activity
were down by -1.0% on a comparable basis and posted organic
growth of +9.7%, excluding the impact of divestitures
finalized in the 4th quarter 2022. Consolidated revenue from
Engineering & Construction was down -15.6%. This
excludes activities carried out as part of internal projects for
Large Industries and Electronics, which are growing.
The Group’s revenue as published was down -7.8%,
impacted by unfavorable energy (-7.6%) and currency (-4.2%)
impacts, the significant perimeter impact being slightly positive at
+0.3%. The latter corresponds to the re-invoicing of energy
consumed by the 16 units taken-over in 2021 in South Africa, less
the impact of the deconsolidation of businesses in Russia. The
favorable impact on 2023 comparable sales growth of
hyperinflation(10) in Argentina is estimated at approximately
+0.6%.
Gas & Services
Gas & Services revenue totaled 26,360 million
euros in 2023, an increase on a comparable basis of
+4.2%.
The two growth drivers for 2023 were the Industrial
Merchant business, with sales up +8.5%, benefiting from
a price impact that remained high (+8.4%) and
resilient volumes, and the Healthcare business
(+8.4%), bolstered by the dynamic development of Home
Healthcare and the increase in the prices of medical gases in an
inflationary environment. Revenue from Large Industries was
down -1.8% over the year: following a low point in the 4th
quarter 2022 and a rebound in the 1st quarter 2023, demand
stabilized at a relatively low level. Sales in Electronics
increased by +2.4% in 2023, following growth of +16% in
2022, the sharp drop in demand from memory manufacturers having
impacted sales from the 2nd quarter.
Revenue as published in the Gas & Services business
was down -7.7%, penalized by negative energy (-8.0%) and
currency (-4.2%) impacts, while the significant scope effect was
slightly positive at +0.3%.
Revenue by geography and business
line
(in millions of euros)
FY 2022
FY 2023
2023/2022 published
change
2023/2022 comparable
change
Americas
10,680
10,169
-4.8%
+5.1%
Europe
11,390
9,734
-14.5%
+4.2%
Asia Pacific
5,608
5,410
-3.5%
+1.8%
Middle East & Africa
895
1,047
+17.1%
+7.0%
GAS & SERVICES REVENUE
28,573
26,360
-7.7%
+4.2%
Large Industries
10,525
7,825
-25.7%
-1.8%
Industrial Merchant
11,567
11,975
+3.5%
+8.5%
Healthcare
3,923
4,077
+3.9%
+8.4%
Electronics
2,558
2,483
-2.9%
+2.4%
Americas
Gas & Services revenue in the Americas totaled 10,169
million euros in 2023, up by +5.1%. Large Industries
sales (-2.2%) were impacted by customer turnarounds and relatively
low demand. The Industrial Merchant business posted strong growth
of +6.7%, boosted by a high price impact (+6.3%) and slightly
positive volumes. In Healthcare, the rise in prices in proximity
care in the United States and the dynamism of the business in South
America contributed to the strong increase in sales (+14.2%).
Electronics revenue was down by -2.8% in a context of slowing
demand from memory manufacturers impacting sales of materials.
- Sales in Large Industries were down -2.2% in
2023, impacted in particular by customer turnarounds and the
divestiture of the activity in Trinidad and Tobago. Business was
also marked by relatively low demand, in particular from customers
in the Steel industry. Oxygen volumes for Chemicals in the United
States increased slightly in the 4th quarter, supported notably by
the start-up of a new unit.
- In Industrial Merchant, the significant increase in
sales of +6.7% in 2023 was supported by a strong
price impact of +6.3%, in an inflationary
context albeit slightly slowing sequentially (+5.2% in the 4th
quarter). Volumes were up slightly over the year. They increased in
the 1st half-year, in particular those of bulk gases. In the 2nd
half of the year, hardgoods volumes were down but gas volumes
remained resilient. They benefited from the demand increase in
particular in the Construction, Research, Energy and Aeronautics
sectors.
- In Healthcare, sales increased sharply, by +14.2%
in 2023. The main drivers of this growth were price increase in
proximity care in the United States, the development of sleep apnea
treatment in Canada in the 1st half-year and the dynamism of the
Medical Gases and Home Healthcare businesses in Latin America.
- Revenue from Electronics was down -2.8% over the
year. Sales of specialty and advanced materials were strongly
impacted by the memory manufacturer production slowdown. Carrier
gas revenue growth was solid, driven by the start-up of new units.
Sales of Equipment and Installations were up, particularly in the
4th quarter.
Americas
- Through an investment of more than 140
million euros, Air Liquide announced that it will establish in
Bécancour (Canada), a platform supplying low-carbon industrial
gases. In addition to the PEM* electrolyzer already in
operation, the new infrastructure will include a new air
separation unit producing renewable oxygen and nitrogen and a
local pipeline network. This new unit is part of the industrial and
port zone's decarbonization initiative. It will mostly supply
customers manufacturing battery components for electric
vehicles via long term contracts.
- Air Liquide is a partner in a record
six out of seven regional Clean Hydrogen Hubs announced by the
U.S. government to accelerate low-carbon hydrogen
development.
- Air Liquide and Trillium Energy
Solutions, a leading supplier of sustainable fueling
infrastructure in the U.S., have signed a Memorandum of
Understanding (MoU) to pursue the development of the heavy-duty
hydrogen fueling market in the U.S.. The ambition
through this partnership is to initially support the development of
150 tonnes per day of hydrogen production and the
refueling infrastructure capable of supplying more than
2,000 heavy-duty vehicles.
*PEM: Proton Exchange Membrane.
Europe
Revenue in Europe was up +4.2% in
2023 and totaled 9,734 million euros. Large Industries sales
were slightly down (-0.9%) in a context of weak demand from
customers in the Chemicals and Steel industries. Revenue from the
Industrial Merchant business rose sharply, by +12.3%, driven by a
price impact of +14.0% and resilient volumes excluding helium and
liquefied CO2. Healthcare sales increased by +5.8%, benefiting from
the dynamism of Home Healthcare and the increase in medical gas
prices in an inflationary context.
- Revenue from Large Industries was slightly down
(-0.9%) over 2023. In the 1st quarter of 2023, demand
strengthened in a context of decreasing energy prices and following
a sharp drop in volumes in the 2nd half of 2022 due to the record
increase in energy prices. Demand from Chemicals and Steel
customers then stabilized at a low level until the end of the year.
Sales of cogeneration units were down in 2023, penalized by lower
electricity prices than in 2022. Hydrogen volumes for Refining
increased compared to 2022, particularly in the 4th quarter.
- In the Industrial Merchant business, sales growth
remained extremely strong at +12.3%, bolstered by a price
impact of +14.0%, in addition to the increase of +23.6%
in 2022. This price impact gradually eased over the year, reaching
+8.4% in the 4th quarter. Volumes excluding helium and liquefied
CO2, whose supply has been tight for several months, remained
resilient, particularly in the Automotive, Manufacturing and
Metallurgy markets.
- Revenue from Healthcare increased by +5.8% in
2023. Diabetes and sleep apnea treatments were the main
contributors to the strong growth in Home Healthcare sales. Growth
in Medical Gas revenue was driven by rising prices in an
inflationary context. Sales of specialty ingredients and equipment
also increased.
Europe
- On the occasion of the signing of a
Memorandum of Understanding to supply the TotalEnergies
refinery in Gonfreville, Normandy, France, with renewable and
low-carbon hydrogen, Air Liquide announced an investment of
over 400 million euros for the construction of its
Normand’Hy electrolyzer. With a capacity of 200 MW,
it will be the largest PEM* electrolyzer ever built and will
integrate equipment manufactured by the joint-venture between Air
Liquide and Siemens Energy. Connected to the Air Liquide local
hydrogen network, this electrolyzer will contribute to the
decarbonization of the industry and transportation.
Normand’hy was recognized as an Important Project of Common
European Interest (IPCEI) by the European Commission and
received support from the French State for an amount of 190
million euros.
- Air Liquide and Vattenfall signed a new
Power Purchase Agreement (PPA) for 115 MW of
renewable installed power capacity. This second PPA of such
scale in Benelux, significantly expands Air Liquide’s
overall renewable power supply in the region. It reaffirms Air
Liquide's commitment to lead the way in decarbonizing the European
industry while lowering its own carbon footprint, in
line with its Sustainable Development objectives.
- Air Liquide has announced that it will
build, own and operate a world-scale carbon capture unit in
the industrial basin of Rotterdam in the Netherlands,
leveraging its proprietary Cryocap™ technology. The new unit
will be installed at the Group’s major hydrogen production plant
located in the port of Rotterdam and will be connected to
Porthos, one of Europe’s largest carbon capture and storage
infrastructure aiming at significantly reducing CO₂
emissions in this large industrial basin.
- Air Liquide and Holcim signed a
Memorandum of Understanding regarding a decarbonization project
of the new Holcim cement factory in Belgium. It will use
oxy-combustion as well as Air Liquide’s innovative proprietary
technology Cryocap™ for carbon capture. The joint funding
application has been awarded by the Innovation Fund of the
European Union.
*PEM: Proton Exchange
Membrane.
Asia Pacific
Revenue for the Asia Pacific region in 2023 rose by
+1.8%, to total 5,410 million euros. The Large
Industries business (-5.5%) was impacted by weak demand and
customer turnarounds. Sales in the Industrial Merchant business
were up sharply, by +9.9%, driven by a high price impact at +7.3%
and by an increase in volumes, in China in particular. Growth in
Electronics was +2.2% over the year: very dynamic in the 1st
quarter, it was then impacted by lower demand from memory
manufacturers and a very high basis of comparison in 2022.
- Sales in Large Industries were down by -5.5% over
the year. They were penalized by weak demand in the region,
particularly in air gases for the Steel industry in Japan, and in
Chemicals. Customer turnarounds in China also impacted sales.
- Industrial Merchant revenue was up sharply by
+9.9% in 2023. The price impact stood at a very high
level of +7.3%, with particularly strong price increases in
Japan and Australia. In China, following a wave of covid-19 at the
start of the year, volumes rose sharply from March until the end of
the year. The Manufacturing and Technology sectors supported the
increase in volumes in the region, as well as new gas supply
contracts for the production of battery materials.
- Sales in the Electronics business were up by
+2.2% in 2023. Following a double-digit increase in the 1st
quarter, revenue slowed to a low point (-5.2%) in the 3rd quarter,
before reaching a level stable compared to the 4th quarter of 2022
by the end of the year. This evolution is explained by the sharp
decline in production by memory manufacturers, which directly
affected the volumes of specialty and advanced materials, and by a
high basis of comparison, with sales growth having hit +18% in
2022. In addition, growth in carrier gas sales continued, driven by
the start-up of new units.
Asia Pacific
- Air Liquide and ENEOS Corporation,
Japan’s leading energy company, have signed a Memorandum of
Understanding (MoU) to collaborate on accelerating the
development of low-carbon hydrogen in Japan and
contribute to the energy transition. This partnership
intends to capitalize on ENEOS' strong energy infrastructure
and market presence in Japan as well as on Air Liquide's
expertise across the entire hydrogen value chain - from
production, liquefaction, transport, storage and distribution to
usages - as well as mastery of Carbon Capture.
- Air Liquide is investing around 60
million euros in China to revamp two Air Separation
Units (ASUs) so they can run on electrical power instead of
steam produced from coal. This will allow to significantly
reduce the CO2 emissions. This investment comes within the
context of the renewal of a long-term industrial gases supply
contract with Tianjin Bohua Yongli Chemical Industry Co.,
Ltd (“YLC”).
Middle East and Africa
Revenue in the Middle East & Africa region increased by
+7.0% to 1,047 million euros in 2023. All business
lines grew. The sales growth in air gases in South Africa and Egypt
explained the solid performance of Large Industries. In
Industrial Merchant, a very high price impact of
+9.9% and rising volumes made it possible to achieve strong
sales growth, despite the impact of the divestiture of businesses
in the Middle East. In Healthcare the main drivers of
dynamic sales growth were a solid price impact, the development of
Home Healthcare in Saudi Arabia and strong activity in South Africa
supported by the contribution of an acquisition.
Middle East and Africa
- In 2023, Air Liquide and Sasol have signed new Power
Purchase Agreements (PPAs) with wind and solar energy
suppliers to provide renewable power to Sasol’s Secunda
site, in South Africa, where Air Liquide operates the largest
oxygen production site in the world. All these PPAs announced in
2022 and 2023 represent a total installed renewable power
capacity of 580 MW. For Air Liquide, these contracts will
contribute to the targeted reduction by 30% to 40% of the CO2
emissions associated with oxygen production in Secunda by
2031.
Engineering & Construction
Consolidated revenue from Engineering & Construction totaled
390 million euros in 2023, down by -15.6%.
Consolidated revenue excludes activities carried out as part of
internal projects for Large Industries and Electronics, which are
growing.
Order intake amounted to 1,511 million euros for
Group projects and third-party customers and hence
exceeded 1 billion euros for the third consecutive year. For
the Group, these include Air Separation Units, an industrial-scale
pilot ammonia cracking unit, a CryocapTM CO2 capture unit and a
large PEM electrolyzer (200 MW). Order intake for third-party
customers includes large units for the production and liquefaction
of hydrogen and air gases.
Engineering & Construction
- On November 8th, 2023, Air Liquide and
Siemens Energy officially inaugurated their joint venture
gigafactory in Berlin. The mass production of PEM*
electrolyzer components will allow the production of low-carbon
hydrogen at industrial scale and competitive cost, and
foster an innovative European ecosystem. The state-of-the-art
gigafactory will ramp-up to an annual production capacity of 3
GW by 2025. With two global leading companies in their field
combining their expertises, this French-German partnership plays a
pivotal role in the emergence of a sustainable hydrogen economy
needed to forge the energy transition.
- Air Liquide, through its Engineering
& Construction business, will work with KBR to offer
low-carbon ammonia technological production solutions
integrating its Autothermal Reforming (ATR) technology. Air
Liquide is a world leader in ATR technology, one of the most
suitable solutions for large-scale production of low-carbon
hydrogen (H2), which is then combined with nitrogen (N2) to produce
low-carbon ammonia (NH3). The solutions provided with KBR, the
world leader in ammonia technology, will also contribute to the
development of a global low-carbon hydrogen market as, when
transformed into ammonia, hydrogen can be easily transported
over long distances.
- Air Liquide announced the construction of
an industrial scale ammonia (NH3) cracking pilot plant in
the port of Antwerp, Belgium. When transformed into ammonia,
hydrogen can be easily transported over long distances. Using
innovative technology, this plant will make it possible to convert,
with an optimized carbon footprint, ammonia into
hydrogen.
* PEM: Proton Exchange
Membrane.
Global Markets & Technologies
Global Markets & Technologies revenue for 2023 was down by
-1.0% compared to 2022, at 858 million euros.
Organic growth reached +9.7%, excluding the
divestitures of the mobility biogas distribution and the
manufacture of small cryogenic tank businesses in the 4th quarter
2022. Hydrogen mobility posted very dynamic growth, boosted by the
ramp-up of a hydrogen liquefier in the United States. The increase
in sales of technological equipment, in particular Turbo-Braytons,
partially offset the decline in sales in the Biogas business,
dragged down by lower energy prices.
Order intake for Group projects and third-party customers
amounted to 926 million euros, up +5.8% compared to
2022. This notably included orders for equipment for biogas
processing, for advanced research laboratories, and for the
electronics industry, as well as Turbo-Brayton LNG reliquefaction
units, and hydrogen refueling stations.
Global Markets &
Technologies
- Air Liquide and Groupe ADP
announced the creation of Hydrogen Airport, the first
engineering and consulting joint venture specializing in
supporting airports integrating hydrogen projects within
their infrastructures.
- Air Liquide and TotalEnergies
announced the creation of the equally owned joint venture
TEAL, to develop a network of hydrogen stations, geared
towards heavy-duty vehicles on major European road
corridors. This initiative will help facilitate access to
hydrogen, enabling the development of its use for goods
transportation and further strengthening the hydrogen sector.
- With the inauguration in June 2023
of Air Liquide’s high-pressure hydrogen refueling station in
Fos-sur-Mer (Marseille, France) and Iveco Group’s readiness to
deliver hydrogen trucks, the two companies are paving the way
for hydrogen long-haul mobility in Europe.
- In May 2023, Future Proof Shipping
(FPS) inaugurated the first hydrogen-powered river container
ship. “H2 Barge 1” carries cargo between the port of Rotterdam
(Belgium) and the Antwerp region (Belgium) for sports equipment
manufacturer Nike. Air Liquide contributed actively to this project
through the supply of hydrogen and the development of a specific
storage system.
OPERATING INCOME RECURRING
Operating income recurring before depreciation and
amortization totaled 7,550 million euros, an increase of
+3.0% as published and +8.5% excluding the currency impact
compared with 2022. Purchases were down -16.2% excluding
the currency impact, mainly due to the decrease in energy
prices, in particular natural gas, following the sharp increase in
2022. Personnel costs increased by +6.5% excluding
currency impacts in a context of continued inflation. Other
operating income and expenses increased by +5.8% excluding
the currency impact and included in particular an increase in
maintenance costs.
The efficiencies(11) amounted to 466 million euros
in 2023, a sharp increase of +23.2% compared with 2022 and
significantly above the annual target of 400 million euros.
Industrial efficiencies represented more than 60% of
efficiencies. They included energy efficiency and production
optimization projects in Large Industries and supply chain
improvements in Industrial Merchant. The Group's digital
transformation continued: in Large Industries with the
contribution of remote operation centers (Smart Innovative
Operations, SIO), in Industrial Merchant and in Healthcare with the
implementation of tools to optimize delivery routes for bulk gases
and, increasingly, for cylinders. The continued implementation of
shared service centers also contributed to efficiencies. In
addition, the cross-functional program of continuous
improvement actively supported the development of efficiencies,
in particular through a digital platform that has already
facilitated the replication of more than 200 projects. Efficiencies
are one of the three levers for improving performance, with price
management, particularly in Industrial Merchant, and dynamic
management of the asset portfolio.
Depreciation and amortization amounted to 2,482
million euros, up +4.1% excluding the currency impact,
reflecting the impact of the start-up of new units.
The Group's operating income recurring (OIR)
reached 5,068 million euros in 2023, an increase of +4.2% as
published. It increased by +11.4% on a comparable basis,
which is significantly higher than the comparable sales growth of
+3.7%, highlighting a strong leverage effect.
The operating margin (OIR over revenue) as published
stood at 18.4%, up +220 basis points compared to 2022. Indeed,
energy costs, which are contractually passed through to Large
Industries customers, decreased significantly in 2023, following
the drop in prices after the sharp increase in 2022. This reduced
published sales, without affecting operating income recurring, and
thus created an accretive effect on the published margin as a
percentage of sales.
Excluding the energy impact, the operating margin improved
very significantly by +80 basis points. Thus, the sum of
improvements in the operating margin excluding energy impact in
2022 and 2023 reached +150 basis points and compares
to the +160 basis points expected over the 4-year period of the
ADVANCE plan. Consequently, the ambition for improvement in the
margin excluding the energy impact of the ADVANCE strategic
plan is raised to +320 basis points over 4 years, which
reflects an acceleration. This corresponds to twice the
improvement initially planned. Hence, +170 basis points of
improvement are expected for the remaining 2 years of the ADVANCE
plan.
Gas & Services
The Gas & Services operating income recurring totaled
5,271 million euros, representing an increase of +4.1%
compared with 2022 and up +10.8% on a comparable
basis. The operating margin stood at 20.0% as published,
a sharp increase of +70 basis points excluding the energy
impact.
The price increase of +8.4% in Industrial
Merchant in 2023 followed the record increase of +14.7% in
2022, demonstrating the Group’s ability to quickly transfer the
rise in costs in an inflationary environment. Prices were also up
in Large Industries, Electronics and Healthcare, in all
regions.
Gas & Services Operating
margin(a)
FY 2022
FY 2023
2023/2022 excluding energy
impact
Americas
19.5%
20.9%
+60 bps
Europe
13.8%
17.7%
+90 bps
Asia Pacific
21.2%
22.4%
+150 bps
Middle East & Africa
23.6%
20.0%
-350 bps
TOTAL
17.7%
20.0%
+70 bps
(a) Operating income recurring / revenue as published.
Operating income recurring for the Americas reached
2,125 million euros in 2023. Excluding the energy
impact, the operating margin grew by +60 basis points
compared with 2022. The Industrial Merchant business contributed
significantly to this improvement, as did the Healthcare business,
albeit to a lesser extent. Higher prices and significant efficiency
gains, particularly in the United States, were the main drivers of
margin growth.
Operating income recurring for Europe totaled
1,723 million euros. Excluding the energy
impact, the operating margin saw a +90 basis points
increase compared with 2022. The Industrial Merchant business made
a major contribution, with an increase in prices and high
efficiency gains supporting the rise in the operating margin. The
efficiencies generated in other businesses also contributed to the
improvement of the margin.
In Asia Pacific, operating income recurring stood at
1,214 million euros. Excluding the energy impact, the
operating margin saw a growth of +150 basis points compared
with 2022. The margin increased in all businesses and in particular
in the Industrial Merchant business, where the increase in prices
and the high level of efficiencies contributed significantly to the
improvement of the margin. The Large Industries business margin
benefited from the payment of an indemnity by a customer.
Operating income recurring for the Middle East and Africa
reached 209 million euros. Excluding the energy
impact, the operating margin was down by -350 basis
points compared with 2022. In accordance with the Large
Industries business model, the introduction of re-invoicing to the
customer for the costs of the energy consumed by the 16 air
separation units acquired at the Secunda site in South Africa had a
highly dilutive effect on the margin(12). Excluding this
re-invoicing, the operating margin increased.
Engineering & Construction
Operating income recurring for Engineering &
Construction was 43 million euros in 2023. The operating
margin stood at 11.1%. It amounted to 9.3% in 2022.
Global Markets & Technologies
Operating income recurring for the Global Markets &
Technologies business stood at 143 million euros
in 2023. The operating margin reached 16.7%, a sharp
increase of +410 basis points compared with 2022. This
performance was notably boosted by the increase in volumes of
hydrogen for mobility in the United States.
Corporate Costs and Research & Development
Corporate costs and Research & Development expenses
stood at 389 million euros, up +9.4% compared with 2022, due
particularly to the increase in personnel expenses, the development
of research and the strengthening of IT security.
NET PROFIT
Other operating income and expenses showed a net balance
of -497 million euros in 2023 compared with -571 million in
2022. Other operating income amounted to 242 million euros and
mainly included the sale of the Group’s stake in Hydrogenics in the
1st half-year. Other operating expenses amounted to -739 million
euros and included exceptional items, with no impact on cash,
following a strategic review that led to the impairment of certain
assets in several countries. They also included the impairment of
assets held for sale (with no impact on cash) and restructuring
costs in several countries and businesses.
Financial income and expenses amounted to -416 million
euros, compared with -386 million euros in 2022. This included
a net cost of debt of -266 million euros, down
sharply by -19.5% excluding currency impact, mainly due to
the decrease in average outstanding debt and thanks to the
exceptional proceeds generated by the early redemption of bonds in
U.S. dollars in the 1st half-year and in euros in the 2nd
half-year. The average net cost of debt at 3.4%, was
up compared with 3.0% in 2022, mainly due to the increase in
factoring costs, which are directly related to the rise in interest
rates. Furthermore, the average net cost of debt does not include
the exceptional income related to the early redemption of bonds.
Other financial income and expenses stood at -151
million euros compared with -98 million euros in 2022. This
sharp increase is due to a provision for interest on arrears and
the impact of the increase in interest rates on pension
obligations.
The tax expense amounted to 972 million euros in
2023, hence an effective tax rate of 23.4%, a sharp decrease
compared with 25.7% in 2022. Indeed, in 2023, the Group benefited
from a reduced tax rate applicable to the capital gain on the
divestiture of the Group’s stake in Hydrogenics and the recognition
of tax credits in Italy, whereas the effective tax rate was higher
in 2022, impacted by significant non-recurring and non-taxable
items(13).
The share of profit of associates amounted to 5
million euros. The share of minority interests in net
profit totaled 110 million euros, down -23.9%, mainly
due to the impairment of an intangible asset in a company with
minorities and the purchase of minority interests.
Net profit (Group share) stood at 3,078
million euros in 2023, showing strong growth of
+11.6% as published and an increase of +21.0% excluding
the currency impact. It exceeded 3 billion euros for the first
time. Net profit recurring (Group share)(14) is obtained by
excluding the proceeds from the sale of the Group’s stake in
Hydrogenics, the impairment of assets held for sale and those of
other assets identified in particular following a strategic
business review, as well as the restructuring costs of the Home
Healthcare business in France. It stood at 3,320 million
euros, up by +5.0%, and +13.3% excluding currency
impact, compared with 2022 net profit recurring (Group
share).
Net earnings per share, stood at 5.90 euros and
were up +11.7% as published compared with 2022, in line with
the increase in net profit (Group share). The average number of
outstanding shares used for the calculation of 2023 net
earnings per share was 522,110,068.
Change in the number of shares
FY 2022
FY 2023
Average number of outstanding shares
522,069,020
522,110,068
DIVIDEND
At the General Meeting on April 30, 2024, the payment of a
dividend of 3.20 euros per share will be proposed to
shareholders for the 2023 fiscal year, representing an increase of
+8.5% compared with the previous year. The total estimated
pay-out taking into account share repurchases, share cancellations
and the exercising of stock-options would amount to 1,723
million euros, representing a pay-out ratio of 56% of
the published net profit. The ex-dividend date has been set for May
20, 2024, and the payment is scheduled for May 22, 2024. Moreover,
a free share attribution, on the basis of one free share for
every 10 shares held, as well as the application of a loyalty
bonus, are planned for June 2024.
Cash Flow and Balance Sheet
(in millions of euros)
2022
2023
Cash flow from operating activities
before changes in working capital
6,255
6,357
Changes in working capital
(397)
(154)
Other cash items
(48)
60
Net cash flows from operating
activities
5,810
6,263
Dividends
(1,487)
(1,667)
Industrial capital expenditure
(3,273)
(3,393)
Other financing operations
31
314
Transactions with minority
shareholders
(4)
(142)
Proceeds from issues of share capital
38
129
Purchase of treasury shares
(192)
(82)
Lease liabilities repayments and net
interests paid on lease liabilities
(283)
(280)
Impact of exchange rate changes and net
indebtedness of newly consolidated
companies & restatement of net finance
costs
(454)
(102)
Change in net debt
187
1,041
Net debt as of December 31
(10,261)
(9,221)
Debt-to-equity ratio as of December
31
41.8%
36.8%
NET CASH FLOW FROM OPERATING ACTIVITIES AND CHANGES IN
WORKING CAPITAL REQUIREMENT
Cash flows from operating activities before changes in
working capital amounted to 6,357 million euros, up
+1.6% as published and +6.6% excluding the currency impact.
This corresponds to a high level of 23.0% of sales, an improvement
of +40 basis points compared with 2022 excluding the energy
impact.
Working Capital Requirement (WCR) rose by 154 million
euros compared with December 31, 2022, impacted notably by the
decrease in energy prices generating an important decrease in the
accounts payable, days payable outstanding remaining stable.
Net cash flow from operating activities after changes in
working capital requirement amounted to 6,263 million
euros, a strong increase of +7.8% compared with 2022 and
+12.8% excluding the currency impact.
CAPITAL EXPENDITURE
(in millions of euros)
Industrial Investments
Financial
Investments(a)
Total capital
expenditures(a)
2019
2,636
568
3,205
2020
2,630
145
2,775
2021
2,917
696
3,613
2022
3,273
140
3,413
2023
3,393
245
3,638
(a) Including transactions with minority shareholders.
Capital expenditure was very high in 2023 at 3,638
million euros, including transactions with minority
shareholders.
Industrial capital expenditure amounted to 3,393
million euros, compared with 3,273 million euros in 2022, an
increase of +3.7% and +8.6% excluding the currency impact,
reflecting dynamic project development activity. For the Gas &
Services business, this expenditure totaled 3,152 million euros
with the corresponding geographical breakdown presented in the
table below.
Gas & Services
(in millions of euros)
Europe
Americas
Asia Pacific
Middle East and Africa
Total
2022
972
979
866
150
2,967
2023
1,113
1,059
835
145
3,152
Financial investments amounted to 245 million
euros in 2023 and comprised the acquisition of 14 entities with
limited size, essentially in the Industrial Merchant and Healthcare
business lines. They also included 142 million euros of
transactions with minority shareholders and in particular the
acquisition of minority shares in a subsidiary in the Middle
East.
Proceeds from the sale of assets reached 403 million
euros in 2023 and reflected a dynamic management of the
portfolio. They mainly included the sale of the Group’s stake in
Hydrogenics and the divestiture of the Large Industries business in
Trinidad and Tobago.
Net capital expenditure(15) totaled 3,221 million
euros, stable compared with 2022.
NET DEBT
Net debt at December 31, 2023, amounted to 9,221
million euros, a decrease of 1,040 million euros
compared with December 31, 2022. Indeed, cash flows from operating
activities after changes in working capital allowed to reduce the
net debt after the payment of over 3.4 billion euros in industrial
investments and 1.6 billion euros in dividends. The net
debt-to-equity ratio stood at 36.8%, highlighting the strength of
cash flows.
ROCE
The return on capital employed after tax (ROCE) was 9.8% in
2023. The recurring ROCE(16) stood at 10.6 %,
an improvement compared to 10.3% in 2022 and aligned with the
ADVANCE strategic plan's double-digit objective.
Extra-financial performance
ADVANCE, the Group's strategic plan 2022-2025 announced
in March 2022, places sustainable development at the heart of the
strategy and combines financial and extra-financial
performance.
The Group's scopes 1 and 2 CO2 emissions in 2023 totaled
37.6 million tonnes of CO2 equivalent(17). They were
down -4.7% compared with 2022 and -4.9% compared with the
2020 baseline. In a context of soft demand from Large
Industries customers, the Group’s main actions driving this
improvement were the increase of voluntary low-carbon energy
supplies and to a lesser extent the energy efficiency
projects. This decrease of emissions was however slightly
penalized by a deterioration in the electricity networks carbon
footprint(18), especially in Europe.
Actions performed in 2023 will contribute to the reduction of
CO2 emissions in the coming years. Thus, in order to accelerate
the decarbonization of its production units, the Group
announced in 2023 the signature of long-term power purchase
agreements (PPAs), for more than 1.5 TWh per year aiming
to reduce its annual emissions of CO2 by around -1.2 million
tonnes. Air Liquide also decided on the construction of a large
scale (200 MW) PEM electrolyzer, on the installation of a
carbon capture unit on one of the Group’s largest hydrogen
production units and on an industrial scale ammonia cracking pilot
plant to further develop its low-carbon hydrogen production
portfolio of solutions. These projects will contribute to the
decarbonization of the Group’s assets after the commissioning of
these renewable electricity sources and the start-up of the
production units.
With these achievements, Air Liquide is confident to achieve its
ADVANCE near term goal of emissions inflection in 2025.
The Group also offers efficient solutions to decarbonize its
customers production plant and actively participates in their
deployment. Hence, the European Commission granted subsidies to two
new carbon capture projects in Germany and in Belgium which use Air
Liquide solutions. This will allow the Group’s clients in the
cement and lime sectors to decrease their CO2 emissions by -2.6
million tonnes per year. In addition, Air Liquide actively
contributes to the decarbonization of mobility, in
particular through joint ventures dedicated to hydrogen
distribution in Europe and Asia.
On the social aspect, safety is a priority. Initiatives have
been undertaken to raise awareness and to prevent accidents with a
“zero accident” ambition. Furthermore, the lost-time accident
frequency rate(19) stood at 1.0 in 2023.
The share of employees benefitting from a common basis of
care coverage reached 78%, showing a sharp increase
compared to 34% in 2021, in line with the objective of offering
coverage to all employees by 2025. The gender equality indicator
improved again in 2023 and stood at a rate of 32% of women among
managers and professionals. Moreover, 73% of the Group’s
employees now have the opportunity to engage in local initiatives
to support communities as part of the Citizen at Work
initiative, an increase compared to 43% in 2022.
Finally, the Access Oxygen program pursues its development.
Over 2 million people have been facilitated with access to
medical oxygen in low and moderate income countries,
a +16% increase compared to 2022.
Sustainable development
- Air Liquide continues its strategy
regarding “scope 3” emissions reduction and made the pledge that
by 2025, 75% of its 50 largest customers will have a
stated carbon neutrality commitment and 100% by 2035.
- Air Liquide's commitments taken in 2022
regarding biodiversity have been recognized and validated by
the Act4nature International initiative:
- to develop and implement an aggregated biodiversity KPI
by 2025, allowing the Group to monitor and communicate on its
biodiversity performance.
- to reinforce its biodiversity assessment criteria into
the investment process for all new projects by 2024;
- to raise awareness amongst employees on
biodiversity;
- to reaffirm the Group's climate and water
ambition.
- Air Liquide signed its first
long-term virtual power purchase agreement (VPPA) with
Statkraft, the largest renewable energy producer in Europe.
Thus, Air Liquide is innovating for the decarbonization and
sustainable development of the Group. This contract will contribute
to reducing Air Liquide's CO2 emissions by 38,000 tonnes per
year. The renewable energy will be produced by newly installed
wind turbines in Poland.
INVESTMENT CYCLE AND FINANCING
Investments
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
(in billions of euros)
Industrial Investment
decisions
Financial investment decisions
(acquisitions)
Total investment
decisions
2019
3.2
0.6
3.7
2020
3.0
0.1
3.2
2021
3.0
0.6
3.6
2022
3.9
0.1
4.0
2023
4.2
0.1
4.3
Industrial and financial investment decisions reached a
record level of 4.3 billion euros in 2023, up
sharply from 4.0 billion euros in 2022.
Industrial investment decisions amounted to 4,189
million euros, thereby exceeding 4 billion euros for the first
time, and compared to 3,861 million euros in 2022.
- In Large Industries, they included in particular
three major projects related to the energy transition
in dynamic industrial areas. A new production unit is being built
in Canada to supply manufacturers of battery materials with
renewable air gases. In France, the first large electrolyzer (200
MW) will produce low-carbon and renewable hydrogen. In the 4th
quarter, the Group decided to invest in a CryocapTM CO2 capture
unit in the Netherlands to decarbonize one of the Group’s largest
hydrogen production units and meet the needs of customers in the
Benelux network. This unit will be connected to Porthos, one of the
largest carbon capture and storage infrastructures in Europe.
- Development of the Electronics business continued in
2023 with investments in carrier gas production units in Asia,
Europe and America, including one large unit. Decisions also
concerned the investment in a new advanced materials production
site in Asia.
- In Industrial Merchant, for the 3rd consecutive year,
investment decisions included around 50 small on-sites, to serve
customers in secondary Electronics or with applications related to
the energy transition, such as the production of battery
materials.
- Investments in the Healthcare business included
distribution equipment to support the growth of medical gas sales,
particularly in South Africa and Spain. They also included
investments in new innovative cylinders and efficiency
projects.
- Within the Global Markets & Technologies business,
the development of hydrogen mobility continued, in particular in
China, Korea and Europe, with investment decisions in hydrogen
filling centers and their logistics chain. The biomethane activity
also continued to grow and a new investment in a production unit in
the United States was decided in the 4th quarter.
Financial investment decisions totaled 94 million
euros in 2023 compared with 112 million euros in 2022. They
included the acquisition of small distributors in the Industrial
Merchant business in the United States, Canada, Italy, India
and China. These acquisitions will contribute to growth and also
strengthen the density of the Group’s local presence, thus
increasing the efficiency of its activities. Decisions also
included the acquisition of companies in Home Healthcare in
Benelux and Sweden, and in Hydrogen mobility in Germany.
These financial investment decisions did not include 142 million
euros of transactions with minority shareholders and in particular
the acquisition of minority shares in a subsidiary in the Middle
East.
The investment backlog hit a record high of 4.4
billion euros in 2023, a sharp increase from 3.5 billion euros
in 2022. Its composition is balanced between Large
Industries and Electronics. In Asia, ongoing
projects mainly concern the Electronics business. The
Americas and Europe saw similar levels of investment,
with projects in Large Industries and Electronics.
Investissements
- In 2023, Air Liquide set a new record by signing 62
new small on-site production units in the Industrial
Merchant and Electronics businesses. This growth
reflects the increased demand for these solutions, and illustrates
our capacity to meet customers' needs. These units offer real
advantages: a continuous, reliable supply of gas, adapted to each
client's production needs and helping to reduce carbon
emissions.
START-UPS
The main start-ups in 2023 concerned production units in Large
Industries and Electronics. In Large Industries, several Air
Separation Units were started up in Europe and the United States,
with in particular the commissioning at the end of the year of a
major unit connected to the Group’s pipeline network in the Gulf
Coast. In Electronics, it was mainly carrier gas production
units that were started up in Asia, the United States and Germany.
In the Global Markets & Technologies activity, the
Group’s first biomethane unit in China was commissioned in the 3rd
quarter of 2023.
The additional contribution to sales of unit start-ups
and ramp-ups totaled 267 million euros in 2023. Electronics
was the main contributor in Asia, while in the Americas and Europe
it was Large Industries. Hydrogen mobility benefited from the
ramp-up of a major hydrogen production and liquefaction unit in the
United States.
The additional contribution to 2024 sales of unit
start-ups and ramp-ups is expected to be between 270 and 290
million euros.
INVESTMENT OPPORTUNITIES
The portfolio of 12-month investment opportunities
remained high, at 3.4 billion euros at the end of 2023. This
reflects the dynamism of the development of projects in line with
the energy transition, which represented more than 40% of
the portfolio, particularly in Europe and the United States.
Opportunities in Electronics are now spread across Asia,
Europe and the United States and are no longer predominantly
located in Asia. The portfolio of opportunities beyond 12 months is
at a very high level and includes major projects related to the
energy transition in Europe and North America.
Financing
“A” CATEGORY FINANCIAL RATING CONFIRMED
Since 2023, Scope Ratings, the leading European credit rating
agency, is one of the rating agencies that evaluate Air Liquide.
Air Liquide is thus rated by three rating agencies, Standard &
Poor’s, Moody’s and Scope Ratings. The long-term ratings from
Standard & Poor’s and Scope Ratings are “A” and from
Moody’s is “A2”. Moreover, the short-term ratings are “A1”
for Standard & Poor’s, “S-1” for Scope Ratings and “P1” for
Moody’s. Standard & Poor’s confirmed its ratings on December
15, 2023 and gave them a stable outlook. Moody’s confirmed its
long-term and short-term rating on September 29, 2023 and gave them
a stable outlook.
Financial Rating Agency
- Scope Ratings, Europe’s first credit rating agency,
assigned a “A” issuer rate to Air Liquide, as well as a “A” rating
for its senior unsecured debt and an “S-1” short-term rate for all
debt instruments issued by Air Liquide SA and Air Liquide Finance.
The outlook associated with the issuer rating is positive.
DIVERSIFYING AND SECURING FINANCIAL SOURCES
As of December 31, 2023, Group financing through capital
markets accounted for 85% of the Group’s total debt, for
a total amount of outstanding bonds of 8.9 billion euros
including all types of bonds, and 0.4 billion euros of commercial
paper.
The total amount of credit facilities was
increased to 3.8 billion euros. The syndicated credit
facility covers an unchanged amount of 2.5 billion euros and
matures in December 2025. Since 2019, this facility includes an
indexation mechanism of financial costs on three of the Group’s CSR
targets in the areas of carbon intensity, gender diversity, and
safety.
Issues and redemptions
In September 2023, the Group issued a private placement
for an amount of 20 billion Japanese yen (128 million euros
equivalent) under the EMTN program, maturing in 8 years. At the end
of 2023, outstanding bonds issued under the EMTN
program amounted to 6.6 billion euros (nominal
amount).
As part of optimizing the management of its debt and cash
surpluses, Air Liquide Finance proceeded in 2023 to several
early bonds redemption:
- In March 2023, for a total of 383 million U.S. dollars
(nominal amount), following a Tender Offering process for two
series of bonds in U.S. dollars, the first maturing in 2026 and the
second in 2046.
- In November 2023, for a total of 236 million euros
(nominal amount), following a Tender Offering process for two
series of bonds maturing in 2024 and a series of bonds maturing in
2025.
In addition, three bond issues were repaid at
maturity in March and September 2023 for a total of 1,112
million euros equivalent.
Sustainable financing
Within the context of its project to build two low-carbon
hydrogen production units in the Shanghai Chemical Industrial Park
(SCIP), a subsidiary of Air Liquide signed a bilateral Green
Loan of 500 million RMB (around 67 million euros). This green
credit is in line with the principles common to the green
taxonomies of China and the European Union, which define strict
criteria for the production of hydrogen with an emission threshold
for low-carbon hydrogen.
This Green Loan is the first granted in the world to finance
low-carbon hydrogen production respecting the principles common to
the green taxonomies of China and the European Union (“China-EU
Common Ground Taxonomy”).
Net Debt by currency as of December 31, 2023
December 31, 2022
December 31, 2023
Euro
46%
52%
U.S. Dollar
37%
30%
Japanese Yen
3%
3%
Chinese Renminbi
1%
1%
Taiwanese Dollar
4%
5%
Others
9%
9%
Investments are generally funded in the currency in which the
cash flows are generated, creating a natural currency hedge. In
2023, net debt decreased in U.S. dollar and increased in euro and
in Taiwanese dollar. The share of dollar in total net debt
decreased in favor of these currencies.
CENTRALIZATION OF CASH AND FUNDING
In 2023, Air Liquide Finance continued to pool the cash balances
of Group entities.
On December 31, 2023, Air Liquide Finance had granted to Group
subsidiaries, directly or indirectly, the equivalent of 12.3
billion euros in loans and received 3.1 billion euros in excess
cash as deposits from them. These transactions were denominated in
24 currencies (mainly the euro, U.S. dollar, Japanese yen, Canadian
dollar, Chinese renminbi, Singapore dollar, British pound).
Approximately 400 subsidiaries are included in the Group cash
pooling, directly or indirectly (including subsidiaries where cash
pooling is carried out locally before being centralized at Air
Liquide Finance).
DEBT MATURITY AND SCHEDULE
The average of the Group’s debt maturity was 5.5
years at December 31, 2023, decreasing compared with December
31, 2022 (5.9 years). Due to the generation of net cash flow in
2023, bond issues reached maturity without the need for refinancing
and early repayments of bonds were made possible.
Finally, the single largest annual maturity represents
approximately 12% of total debt and the debt maturing in the next
12 months is less than 2.3 billion euros.
OUTLOOK
In 2023, Air Liquide achieved a solid performance,
highlighting the resilience and quality of its business
model as well as the mobilization and agility of its
teams in a complex and changing macroeconomic and geopolitical
environment. The Group’s performance was characterized by an
increase in sales on a comparable basis, a further
improvement in its operating margin excluding the energy impact
and an accelerating investment momentum, particularly in
decarbonization projects.
In particular, the Group has practically reached, in two
years, the margin ambition targeted for 2025 as part of its
ADVANCE strategic plan. As a consequence, it is announcing today
a doubling of its initial ambition.
Air Liquide also confirms its ADVANCE financial objectives,
related to sales growth on a comparable basis and Return on Capital
Employed, as well as its investment decision ambition. In addition,
on the extra-financial level, the many decarbonization initiatives
give the Group confidence in its objective to combine growth in its
business with a reduction in its CO2 emissions in absolute value
from 2025.
Revenue reached 27.61 billion euros, an increase of +3.7% on
a comparable basis in 2023. On a published basis, it stood at
-7.8%, due to the drop in energy prices - energy costs being
contractually passed through to Large Industries customers - as
well as negative currency impacts. The Gas & Services
business, which represented 95% of the Group’s revenue, was up
+4.2% on a comparable basis. Within this activity, all regions
saw growth, in particular the Americas and
Europe, driven notably by Industrial Merchant and
Healthcare.
In line with its ADVANCE strategic plan, Air Liquide
continued to improve its operational performance. The Group
generated record efficiencies of 466 million euros, up +23%
despite an inflationary context unfavorable to savings on
procurement, and continued the dynamic management of its business
portfolio. Its ability to provide its customers with value-added
offerings allows it to adjust its prices in Industrial Merchant. As
a result, the operating margin increased further, by +80
basis points in 2023 excluding the energy impact, and therefore
the sum of improvements in the operating margin excluding energy
impact in 2022 and 2023 reached +150 basis points.
Having practically reached its margin target halfway through
ADVANCE which was at +160 basis points, Air Liquide now aims for
a +320 basis points increase, twice its initial ambition, over the
duration of the plan.
Net profit (Group share) amounted to 3.08 billion euros, up
+11.6% as published. Net profit recurring(20)
increased by +13.3% excluding the currency impact. Cash
flow(21) grew by +12.8% excluding the currency impact. The balance
sheet is strong with a net debt to equity ratio of 36.8%. At 10.6%
at end-December, recurring ROCE(22) remained well above 10%, in
line with the objectives of ADVANCE, despite the increase in
investments. Reflecting Air Liquide’s confidence in the future, the
dividend that will be submitted to the shareholders’ vote in
April amounts to 3.20 euros per share, i.e. an increase of
+8.5%. In addition, a free share attribution is
scheduled for June 2024, on the basis of one share for every 10
shares held.
The investment dynamic of the Group is accelerating,
supported in particular by its projects in the energy transition
and electronics. The backlog is historically high at 4.4 billion
euros. Investment decisions reached a record level of 4.3 billion
euros in 2023.
In 2024, Air Liquide is confident in its ability to further
increase its operating margin and to deliver growth in Net profit
recurring, at constant exchange rates(23).
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
- Reported and restated CO2 emissions
- Operating income recurring before depreciation and amortization
excluding IFRS16 at 2015 exchange rate to calculate the carbon
intensity
- Recurring net profit Group share
- Recurring net profit excluding currency effect
- 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 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.
Note: exceptionally, the acquisition of Sasol production units
in 2021 had an impact in 2 steps on Group sales. After the
acquisition of the assets in July 2021 (1st step), devices were
installed on the units in 2022 in order to measure the energy
consumed which, from October 2022 (2nd step), could be re-invoiced
to the customer according to the standard Large Industries
contractual frame. For the sake of transparency in financial
communication, sales related to energy consumed and contractually
re-invoiced to the customer are identified within the significant
scope and are therefore excluded from the comparable growth. This
element has thus been accounted for in the significant scope during
12 months from October 2022.
Calculation of performance indicators (Year)
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)
FY 2023
FY 2023/2022 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
FY 2023/2022 Comparable
Growth
Revenue
Group
27,608
-7.8%
(1,255)
(1,765)
(503)
97
+3.7%
Impacts in %
-4.2%
-5.9%
-1.7%
+0.3%
Gas & Services
26,360
-7.7%
(1,225)
(1,765)
(503)
97
+4.2%
Impacts in %
-4.2%
-6.2%
-1.8%
+0.3%
Operating Income Recurring
Group
5,068
+4.2%
(318)
-
-
(25)
+11.4%
Impacts in %
-6.6%
-
-
-0.6%
Gas & Services
5,271
+4.1%
(311)
-
-
(24)
+10.8%
Impacts in %
-6.2%
-
-
-0.5%
OPERATING MARGIN AND OPERATING MARGIN EXCLUDING
ENERGY
The operating margin is the ratio of the operating income
recurring divided by revenue. The operating margin excluding the
energy impact corresponds to operating income recurring (which is
not impacted in absolute value by the energy costs contractually
re-invoiced to Large Industries customers) divided by revenue
restated for the energy impact to which the corresponding currency
impact is attached. The ratio of operating income recurring divided
by revenue (whether restated or not for the energy impact) is
calculated with a one decimal place rounded number. 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.
FY 2023
Natural gas impact(a)
Electricity impact(a)
FY 2023, excluding energy
impact
Revenue
Group
27,608
(1,776)
(514)
29,898
Gas & Services
26,360
(1,776)
(514)
28,650
Operating Income Recurring
Group
5,068
5,068
Gas & Services
5,271
5,271
Operating Margin
Group
18.4%
17.0%
Gas & Services
20.0%
18.4%
(a) Including the currency impact linked to the considered
energy impact.
REPORTED AND RESTATED CO2 EMISSIONS
(in thousands of metric tonnes CO₂
eq.)
FY 2020
FY 2022
FY 2023
2023/2020 change
2023/2022 change
Scope 1: total direct greenhouse gas
emissions (GHG)(a)
15,345
16,273
16,107
+4.9%
-1.1%
Scope 2: total indirect greenhouse gas
emissions (GHG)(a)
17,184
23,033
21,510
+25.2%
-6.6%
Total emissions as reported(a)
32,529
39,306
37,617
+15.6%
-4.3%
Total restated emissions(b)
39,564
39,464
37,617
-4.9%
-4.7%
(a) « Market based », actual Group emissions including changes
in scope having an impact (upward and downward) on CO2 emissions
during the year from the effective date. (b) « Market based »,
restated to take into account over a full year from 2020 and each
subsequent year, the emissions of the assets which correspond to
changes in scope and which have a significant impact (upwards and
downwards) on CO2 emissions.
OPERATING INCOME RECURRING BEFORE DEPRECIATION AND
AMORTIZATION EXCLUDING IFRS 16 AT 2015 EXCHANGE RATE TO CALCULATE
THE CARBON INTENSITY
(in millions of euros and thousand of
tonnes)
2015
2023
2023/2015 change
(A) Operating income recurring before
depreciation and amortization
4,033
7,550
(B) Currency impact (2015)(a)
(361)
(C) IFRS16 Impact(b)
260
(A) - (B) - (C) = (D) EBITDA used for
Carbon Intensity calculation
4,033
7,651
(E) CO2 equivalent emissions (Scopes 1 +
2(c)) in thousands of tonnes
29,413
37,617
Carbon Intensity (E) / (D)
7.3
4.9
-33%
(a) At 2015 exchange rate for countries in hyperinflationary
context, their EBITDA being converted at 2023 rate. (b) The IFRS 16
impact on operating income recurring before depreciation and
amortization includes the neutralization of rental expenses, which
are then reintegrated into depreciation and amortization and other
financial expenses booked in relation to IFRS 16. (c) Scope 2
emissions calculated from the specific supplies (market-based): the
Group hence adopted the methodology recommended by the GHG
Protocol.
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.
FY 2022
FY 2023
2023/2022 variation
(A) Net Profit (Group Share) - As
Published
2,758.8
3,078.0
+11.6%
(B) Exceptional and significant
transactions after-tax with no impact on OIR
- Exceptional provisions on industrial
assets in Russia and other related costs
(575.6)
- Exceptional income related to
joint-venture take-over in Asia Pacific
205.5
- Provision for risks in Engineering &
Construction activity
(32.8)
- Sales of Group stake in Hydrogenics
159.4
- Impairment of assets held for sale and
of other assets identified in particular following a strategic
review
(345.7)
- Restructuring costs of Home Healthcare
activity in France
(55.7)
(A) - (B) = Net Profit Recurring (Group
Share)
3,161.7
3,320.0
+5.0%
(C) Currency impact
(262.0)
(A) - (B) - (C) = Net Profit Recurring
(Group Share) excluding currency impact
3,582.0
+13.3%
NET PROFIT EXCLUDING IFRS 16 AND NET PROFIT RECURRING
EXCLUDING IFRS 16
Net profit excluding IFRS 16:
FY 2022
FY 2023
(A) Net Profit as Published
2,903.9
3,188.4
(B) = IFRS16 Impact(a)
(15.6)
(17.8)
(A) - (B) = Net Profit excluding
IFRS16
2,919.5
3,206.2
(a) The IFRS 16 impact includes the reintegration of leasing
expenses less depreciation and other financial expenses booked in
relation to IFRS 16.
Net profit recurring excluding IFRS 16:
FY 2022
FY 2023
(A) Net Profit as Published
2,903.9
3,188.4
(B) Exceptional and significant
transactions after-tax with no impact on OIR
(402.9)
(266.1)
(A) - (B) = Net Profit
recurring
3,306.8
3,454.5
(C) IFRS16 Impact(a)
(15.6)
(17.8)
(A) - (B) - (C) = Net Profit recurring
excluding IFRS16
3,322.4
3,472.3
(a) The IFRS16 impact includes the reintegration of leasing
expenses less depreciation and other financial expenses booked in
relation to IFRS 16.
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.
FY 2022
H1 20223
FY 2023
ROCE Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(c)
Net Profit Excluding IFRS16
3,206.2
3,206.2
Net Finance costs
(265.5)
(265.5)
Effective Tax Rate (1)
23.6%
Net Finance costs after tax
(202.9)
(202.9)
Net Profit - Net financial
costs after tax
3,409.1
3,409.1
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
24,628.5
24,110.1
25,117.5
24,618.7
Net Debt
10,261.3
10,550.4
9,220.8
10,010.8
Average of (total equity + net
debt)
34,889.8
34,660.5
34,338.3
34,629.5
ROCE
9.8%
(1) excluding non-recurring tax impact.
RECURRING ROCE
The recurring ROCE is calculated in the same manner as the ROCE
using the recurring net profit for the numerator.
FY 2022
H1 20223
FY 2023
Recurring ROCE
Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(c)
Net Profit Recurring Excluding
IFRS16
3,472.2
3,472.3
Net Finance costs
(265.5)
(265.5)
Effective Tax Rate(a)
23.6%
Net Finance costs after tax
(202.9)
(202.9)
Recurring Net Profit Excluding
IFRS16
- Net financial costs after
tax
3,675.1
3,675.2
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
24,628.5
24,110.1
25,117.5
24,618.7
Net Debt
10,261.3
10,550.4
9,220.8
10,010.8
Average of (total equity + net
debt)
34,889.8
34,660.5
34,338.3
34,629.5
Recurring ROCE
10.6%
(a) excluding non-recurring tax impact
Calculation of performance indicators - Quarter
Q4 2023
Q4 2023/2022 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q4 2023/2022 Comparable
Growth
Revenue
Group
6,817
-8.9%
(435)
(377)
(124)
(3)
+3.7%
Impacts in %
-5.8%
-5.1%
-1.6%
-0.1%
Gas & Services
6,472
-8.5%
(426)
(377)
(124)
(3)
+4.6%
Impacts in %
-6.0%
-5.3%
-1.8%
-
BY GEOGRAPHY
Revenue
(in millions of euros)
Q4 2022
Q4 2023
Published change
Comparable change
Americas
2,727
2,454
-10.0%
+5.6%
Europe
2,700
2,428
-10.1%
+4.7%
Asia Pacific
1,388
1,334
-3.9%
+1.8%
Middle East & Africa
261
256
-1.6%
+8.0%
Gas & Services Revenue
7,076
6,472
-8.5%
+4.6%
Engineering & Construction
138
100
-27.1%
-25.4%
Global Markets & Technologies
266
245
-8.3%
-5.7%
GROUP REVENUE
7,480
6,817
-8.9%
+3.7%
BY WORLD BUSINESS LINE
Revenue
(in millions of euros)
Q4 2022
Q4 2023
Published change
Comparable change
Large industries
2,473
1,883
-23.9%
+1.9%
Industrial Merchant
2,965
2,937
-0.9%
+5.5%
Healthcare
999
1,030
+3.2%
+9.9%
Electronics
639
622
-2.8%
+2.7%
GAS & SERVICES REVENUE
7,076
6,472
-8.5%
+4.6%
Definitions
Portfolio of 12-month investment opportunities: Cumulative value
of investment opportunities taken into account by the Group for a
decision within the next 12 months. Industrial projects with a
value of more than 5 million euros for Large Industries and more
than 3 million euros for other business lines, including
replacement assets and efficiency projects.
Investment decisions: Cumulative value of industrial and
financial investment decisions. Growth and non-growth industrial
projects, including the renewal of assets, efficiency projects,
maintenance and safety, as well as financial decisions
(acquisitions).
Investment backlog: Cumulative value of investments for projects
that have been decided but not yet started up. Industrial projects
of more than 10 million euros, including the renewal of assets and
efficiency projects.
Impact of hyperinflation in Argentina: Estimation calculated by
capping the price increase in 2023 at 26% (an average annual level
of 26% over 3 years corresponds to the definition of
hyperinflation).
Geographic and segment information
FY 2022
FY 2023
(in millions of euros and %)
Revenue
Operating income
recurring
OIR margin
Revenue
Operating income
recurring
OIR margin
Americas
10,680
2,084
19.5%
10,169
2,125
20.9%
Europe
11,390
1,577
13.8%
9,734
1,723
17.7%
Asia Pacific
5,608
1,190
21.2%
5,410
1,214
22.4%
Middle East and Africa
895
211
23.6%
1,047
209
20.0%
Gas & Services
28,573
5,062
17.7%
26,360
5,271
20.0%
Engineering and Construction
474
44
9.3%
390
43
11.1%
Global Markets & Technologies
887
112
12.6%
858
143
16.7%
Reconciliation
-
(356)
-
-
(389)
-
TOTAL GROUP
29,934
4,862
16.2%
27,608
5,068
18.4%
Consolidated income statement
(in millions of euros)
FY 2022
FY 2023
Revenue
29,934.0
27,607.6
Other income
244.3
233.9
Purchases
(13,813.0)
(11,146.8)
Personnel expenses
(4,963.4)
(5,099.5)
Other expenses
(4,074.2)
(4,045.2)
Operating income recurring before
depreciation and amortization
7,327.7
7,550.0
Depreciation and amortization expenses
(2,465.9)
(2,482.0)
Operating income recurring
4,861.8
5,068.0
Other non-recurring operating income
262.4
242.3
Other non-recurring operating expenses
(833.1)
(738.8)
Operating income
4,291.1
4,571.5
Net finance costs
(288.4)
(265.5)
Other financial income
32.4
15.4
Other financial expenses
(130.0)
(166.1)
Income taxes
(1,002.3)
(971.8)
Share of profit of associates
1.1
4.9
PROFIT FOR THE PERIOD
2,903.9
3,188.4
- Minority interests
145.1
110.4
- Net profit (Group share)
2,758.8
3,078.0
Basic earnings per share (in
euros)
5.28
5.90
Consolidated balance sheet
ASSETS (in millions of euros)
December 31, 2022
December 31, 2023
Goodwill
14,587.2
14,194.2
Other intangible assets
1,811.4
1,631.3
Property, plant and equipment
23,646.9
23,652.2
Non-current assets
40,045.5
39,477.7
Non-current financial assets
775.5
696.7
Investments in equity affiliates
185.7
180.1
Deferred tax assets
232.3
225.2
Fair value of non-current derivatives
(assets)
40.8
35.1
Other non-current assets
1,234.3
1,137.1
TOTAL NON-CURRENT ASSETS
41,279.8
40,614.8
Inventories and work-in-progress
1,961.0
2,027.6
Trade receivables
3,034.8
2,993.7
Other current assets
985.4
862.7
Current tax assets
196.3
42.9
Fair value of current derivatives
(assets)
107.6
70.7
Cash and cash equivalents
1,911.4
1,624.9
TOTAL CURRENT ASSETS
8,196.5
7,622.5
ASSETS HELD FOR SALE
41.7
95.1
TOTAL ASSETS
49,518.0
48,332.4
EQUITY AND LIABILITIES (in millions of
euros)
December 31, 2022
December 31, 2023
Share capital
2,879.0
2,884.8
Additional paid-in capital
2,349.0
2,447.7
Retained earnings
15,868.0
16,063.7
Treasury shares
(118.4)
(152.7)
Net profit (Group share)
2,758.8
3,078.0
Shareholders' equity
23,736.4
24,321.5
Minority interests
835.6
721.6
TOTAL EQUITY
24,572.0
25,043.1
Provisions, pensions and other employee
benefits
1,991.1
2,004.8
Deferred tax liabilities
2,465.4
2,329.0
Non-current borrowings
10,168.8
8,560.5
Non-current lease liabilities
1,052.2
1,046.3
Other non-current liabilities
317.8
454.7
Fair value of non-current derivatives
(liabilities)
54.5
48.0
TOTAL NON-CURRENT LIABILITIES
16,049.8
14,443.3
Provisions, pensions and other employee
benefits
282.4
363.8
Trade payables
3,782.6
3,310.5
Other current liabilities
2,215.6
2,310.1
Current tax payables
260.1
236.4
Current borrowings
2,003.9
2,285.3
Current lease liabilities
227.6
219.7
Fair value of current derivatives
(liabilities)
108.6
76.2
TOTAL CURRENT LIABILITIES
8,880.8
8,802.0
LIABILITIES HELD FOR SALE
15.4
44.0
TOTAL EQUITY AND LIABILITIES
49,518.0
48,332.4
Consolidated cash flow statement
(in millions of euros)
FY 2022
FY 2023
Operating activities
Net profit (Group share)
2,758.8
3,078.0
Minority interests
145.1
110.4
Adjustments:
• Depreciation and amortization
expense
2,465.9
2,482.0
• Changes in deferred taxes
92.6
(59.8)
• Changes in provisions
565.9
471.2
• Share of profit of equity affiliates
(1.1)
(4.9)
• Profit/loss on disposal of assets
(129.9)
(126.9)
• Net finance costs
215.4
192.9
• Other non cash items
142.5
214.4
Cash flow from operating activities
before changes in working capital
6,255.2
6,357.3
Changes in working capital
(396.8)
(154.4)
Other cash items
(48.3)
60.1
Net cash flows from operating
activities
5,810.1
6,263.0
Investing activities
Purchase of property, plant and equipment
and intangible assets
(3,273.0)
(3,393.4)
Acquisition of consolidated companies and
financial assets
(135.8)
(103.0)
Proceeds from sale of property, plant and
equipment and intangible assets
92.0
63.2
Proceeds from the sale of subsidiaries,
net of net debt sold and from the sale of financial assets
61.1
339.7
Dividends received from equity
affiliates
13.8
14.5
Net cash flows used in investing
activities
(3,241.9)
(3,079.0)
Financing activities
Dividends paid
• L'Air Liquide S.A.
(1,410.5)
(1,581.2)
• Minority interests
(76.3)
(85.4)
Proceeds from issues of share capital
37.7
128.8
Purchase of treasury shares
(191.5)
(81.9)
Net financial interests paid
(236.1)
(222.5)
Increase (decrease) in borrowings
(617.7)
(1,215.6)
Lease liabilities repayments
(249.0)
(240.1)
Net interests paid on lease
liabilities
(33.6)
(39.8)
Transactions with minority
shareholders
(4.0)
(142.0)
Net cash flows from (used in) financing
activities
(2,781.0)
(3,479.7)
Effect of exchange rate changes and change
in scope of consolidation
(165.2)
(61.6)
Net increase (decrease) in net cash and
cash equivalents
(378.0)
(357.3)
NET CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD
2,138.9
1,760.9
NET CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD
1,760.9
1,403.6
The analysis of net cash and cash equivalents at the end of
the period is as follows:
(in millions of euros)
December 31, 2022
December 31, 2023
Cash and cash equivalents
1,911.4
1,624.9
Bank overdrafts (included in current
borrowings)
(150.5)
(221.3)
NET CASH AND CASH EQUIVALENTS
1,760.9
1,403.6
Net debt calculation
(in millions of euros)
December 31, 2022
December 31, 2023
Non-current borrowings
(10,168.8)
(8,560.5)
Current borrowings
(2,003.9)
(2,285.3)
TOTAL GROSS DEBT
(12,172.7)
(10,845.8)
Cash and cash equivalents
1,911.4
1,624.9
TOTAL NET DEBT AT THE END OF THE
PERIOD
(10,261.3)
(9,220.9)
Statement of changes in net debt
(in millions of euros)
FY 2022
FY 2023
Net debt at the beginning of the
period
(10,448.3)
(10,261.3)
Net cash flows from operating
activities
5,810.1
6,263.0
Net cash flows used in investing
activities
(3,241.9)
(3,079.0)
Net cash flows used in financing
activities excluding changes in borrowings
(1,927.2)
(2,041.6)
Total net cash flows
641.0
1,142.4
Effect of exchange rate changes, opening
net debt of newly acquired companies and others
(248.0)
150.7
Adjustment of net finance costs
(206.0)
(252.7)
Change in net debt
187.0
1,040.4
NET DEBT AT THE END OF THE
PERIOD
(10,261.3)
(9,220.9)
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
Gas & Services
FY 2023 split of revenue and comparable
growth in %
Total
Large Industries
Industrial Merchant
Electronics
Healthcare
Americas
100%
16%
69%
5%
10%
+5.1%
-2.2%
+6.7%
-2.8%
+14.2%
Europe
100%
37%
32%
2%
29%
+4.2%
-0.9%
+12.3%
N.C.
+5.8%
Asia Pacific
100%
34%
29%
33%
4%
+1.8%
-5.5%
+9.9%
+2.2%
N.C.
Middle-East and Africa
100%
N.C.
N.C.
N.C.
N.C.
+7.0%
Gas & Services
100%
30%
45%
9%
15%
+4.2%
-1.8%
+8.5%
+2.4%
+8.4%
Engineering & Construction
-15.6%
Global Markets & Technologies
-1.0%
GROUP TOTAL
+3.7%
N.C.: Not communicated.
Operating Income Recurring
Operating margin in %(a)
Operating Income Recurring in million
euros
FY 2022
FY 2023
2023/2022 excluding energy
impact
Operating Income Recurring FY
2023
Americas
19.5%
20.9%
+60 bps
2,125
Europe
13.8%
17.7%
+90 bps
1,723
Asia Pacific
21.2%
22.4%
+150 bps
1,214
Middle-East and Africa
23.6%
20.0%
-350 bps
209
Gas & Services
17.7%
20.0%
+70 bps
5,271
Engineering & Construction
9.3%
11.1%
+180 bps
43
Global Markets & Technologies
12.6%
16.7%
+410 bps
143
GROUP
16.2%
18.4%
+ 80 pbs
5,068
(a) Operating income recurring / revenue as
published.
Investments
(in billion euros)
2023
12-month portfolio of investment
opportunities(a)
3.4
Investment decisions(b)
4.3
Investment backlog(a)
4.4
Additional contribution to revenue of unit
start-ups and ramp-ups(b) (in million euros)
267
(a) At the end of the reporting period. (b) Cumulated from the
beginning of the calendar year until the end of the reporting
period.
François Jackow also comments the Group’s
2023 results in a video interview, available in French and
English at www.airliquide.com.
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 1st Quarter Revenue April 24, 2024
Air Liquide is a world leader in gases, technologies and
services for industry and healthcare. Present in 72 countries with
67,800 employees, the Group serves more than 4 million customers
and patients. Oxygen, nitrogen and hydrogen are essential small
molecules for life, matter and energy. They embody Air Liquide’s
scientific territory and have been at the core of the Group’s
activities since its creation in 1902.
Taking action today while preparing the future is at the heart
of Air Liquide’s strategy. With ADVANCE, its strategic plan for
2025, Air Liquide is targeting a global performance, combining
financial and extra-financial dimensions. Positioned on new
markets, the Group benefits from major assets such as its business
model combining resilience and strength, its ability to innovate
and its technological expertise. The Group develops solutions
contributing to climate and the energy transition—particularly with
hydrogen—and takes action to progress in areas of healthcare,
digital and high technologies.
Air Liquide’s revenue amounted to more than 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 Net profit recurring
excluding exceptional and significant transactions that have no
impact on the operating income recurring. 2 Operating cash flow
after change in working capital requirement. 3 Based on Net profit
recurring. 4 Operating margin excluding energy passthrough impact.
Net profit recurring excluding exceptional and significant
transactions that have no impact on the operating income recurring.
5 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. 6 See definition in
appendix. 7 See definition and reconciliation in appendix. 8 In
metric tonnes of scopes 1 and 2 CO2-equivalent, “market based”,
restated to take into account over a full year from 2020 and each
subsequent year, the emissions of the assets which correspond to
changes in scope and which have a significant impact (upwards and
downwards) on CO2 emissions. 9 Lost-time frequency rate for Group
employees and temporary workers. Number of accidents with at least
one day's absence from work per million hours worked. 10 See
definition in Appendix. 11 See definition in appendix. 12 For more
information, see explanation in appendix. 13 Mainly non-deductible
provisions on activities in Russia, and non-taxable capital gains
relating to the takeover of a joint activity in Asia. 14 See
definition and reconciliation in appendix. 15 Including
transactions with minority shareholders and dividends received from
equity affiliates. 16 See definition and reconciliation in the
appendices. 17 In metric tonnes of scopes 1 and 2 CO2-equivalent,
“market based”, restated to take into account over a full year from
2020 and each subsequent year, the emissions of the assets which
correspond to changes in scope and which have a significant impact
(upwards and downwards) on CO2 emissions. 18 Electrical grid
residual emission factors. Note that the calculation of scope 2
emissions from electrical network consumption is based on available
data and therefore from the previous year, in this case 2022 for
2023 emissions. 19 Lost-time frequency rate for Group employees and
temporary workers. Number of accidents with at least one day's
absence from work per million hours worked. 20 Net profit recurring
excluding exceptional and significant transactions that have no
impact on the operating income recurring. 21 Cash Flow from
Operations after changes in working capital requirement. 22 Based
on Net profit recurring. 23 Operating margin excluding energy
passthrough impact. Net profit recurring excluding exceptional and
significant transactions that have no impact on the operating income
recurring.
View source
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