Despite a complex and changing macroeconomic and geopolitical environment, Air Liquide delivered a very solid performance in the first half of the year (H1), according to CEO François Jackow.

Reporting its first half 2023 financial results today (27^th July), the industrial gas giant said revenue in H1 reached €13.9bn, an increase of 4.9% on a comparable basis in the first semester.

The Gas & Services activity, which represented 96% of the Group’s revenue, was up 5.3% on a comparable basis. Within this activity, all regions saw growth, in particular the Americas and Europe, driven notably by Industrial Merchant and Healthcare.

Net profit amounted to €1.7bn, up 32%. Recurring net profit increased 11.3%, excluding currency impacts, and cash flow grew by 13%, excluding currency impacts.

In line with its ADVANCE strategic plan, Air Liquide continued the steady improvement of its operational performance. The Group generated efficiencies of €206m, up +24% despite an inflationary context unfavourable to savings on purchases and continued the dynamic management of its business portfolio.

Results by segment

Air Liquide’s Industrial Merchant revenue continued to grow strongly, driven by a high price effect of 10.7% and growing volumes. Large Industries revenue, down 3.6%, saw a significant improvement compared to the second half of 2022 which was heavily impacted by a sharp increase in energy prices. Electronic sales were up 6.3% in the half year. Strong growth in sales in Healthcare was supported by the price increase of medical gases.

Consolidated revenue from Engineering & Construction totalled €180m in H1, down 17.3% compared to the high sales to third-party customers in H1 2022. Consolidated revenue does not reflect the volume of activity carried out on internal projects in Large Industries or Electronics. Order intake amounted to €530m, a slight increase compared to H1 2022.

Sales in the Global Markets & Technologies business increased 3.9% on a comparable basis and amounted to €395m in H1 2023. Organic growth reached +17%, excluding several divestitures. Order intake for Group projects and third-party customers reached €496m.

Results by region

Gas & Services revenue in the Americas reached €5.2bn in H1 2023, representing a comparable increase of 6.7%. Sales in the Industrial Merchant business were up sharply, by 10%. Customer shutdowns negatively impacted Large Industries sales, while volumes remained solid overall in the US Gulf Coast. In Healthcare, price increases in Proximity Care in the US and the dynamism of Home Healthcare in Canada and South America were the main contributors to a strong increase in sales, up 13.5%. Revenue from the Electronics business was down by -5.8% in H1 due to the sharp decline in sales of materials in Q2.

Revenue in Europe was up 4.8% on a comparable basis during H1 2023 and reached €4.9bn. In Industrial Merchant, a strong increase in sales of 18.1% benefited from a price effect that remained high. Healthcare sales were up 5.8%, driven notably by the strong development of diabetes treatment in Home Healthcare and higher medical gas. Large Industries revenue was down 3.6% in H1; however, this was an improvement compared to Q2 2022.

Sales in Asia Pacific were up 3.8% on a comparable basis in H1 2023 and amounted to €2.7bn. Large Industries revenue, down 5.9%, was impacted by weak demand and customer shutdowns. In Industrial Merchant, the sharp increase in sales of 12.1% was supported by a price effect of 9.2% and a strong increase in volumes in China in Q2. The Electronics business was up 7.3%, after double-digit sales growth in Q1.

Revenue in the Middle East & Africa increased by 5.8% on a comparable basis to €508m in the H1 2023. Sales growth in air gases in South Africa and Egypt explained the solid performance of Large Industries. In Industrial Merchant, a high price effect and the increase in volumes made it possible to fully absorb the impact of the divestiture of businesses in the Middle East and achieve solid sales growth.

Outlook

Air Liquide said its strong investment momentum reflects its commitment to the climate and paving the way for future growth. Project backlog of €3.5bn remained high. Investment decisions reached €1.8bn this semester. With more than 40% of projects linked to the energy transition, 12-month investment opportunities are numerous and total €3.4bn.

Jackow concluded, “In 2023, Air Liquide is confident in its ability to further increase its operating margin and to deliver recurring net profit growth, at constant exchange rates.”