- Outstanding H1 2021 performance:
- increase in sales and operating margin
- strong investment portfolio
- numerous initiatives related to sustainable
development
Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of
euros)
H1 2021
2021/2020 as published
2021/2020 comparable
(a)
Group Revenue
10,846
+5.6%
+9.2%
of which Gas & Services
10,350
+4.3%
+8.0%
Operating Income Recurring
(OIR)
1,948
+7.4%
+17.1%
Group OIR Margin
18.0%
+40 bps
Variation excluding energy
+100 bps
Gas & Services OIR Margin
20.0%
+40 bps
Variation excluding energy
+120 bps
Net Profit (Group Share)
1,239
+14.9%
Net Profit Recurring (Group Share) (b)
1,239
+11.3%
Earnings per Share (in euros)
2.63
+14.8%
Cash flow from operating activities before
changes in net working capital
2,483
+4.8%
Net Debt
€12.0 bn
Return on Capital Employed after tax -
ROCE
9.5%
+120 bps
Recurring ROCE (c)
9.0%
+60 bps
(a) Change excluding the currency, energy (natural gas and
electricity) and significant scope impacts, see reconciliation in
appendix.
(b) Excluding exceptional and significant transactions that have
no impact on the operating income recurring, see reconciliation in
appendix.
(c) Based on the recurring net profit, see reconciliation in
appendix.
Commenting on the 1st half of 2021, Benoît Potier, Chairman
and CEO of Air Liquide, said:
“This first half excellent performance reflects the
momentum of our markets and the acceleration in sales in the 2nd
quarter. These exceeded the level seen in 2nd quarter of 2019(1),
across all regions and for all activities. Sales for the half
year were close to 11 billion euros, marking strong growth
of +9.2% on a comparable basis, versus the 1st half of
2020.
In Gas & Services, the rebound in industrial
activities was particularly strong in the 2nd quarter, both in
Large Industries and Industrial Merchant. Electronics also recorded
strong growth at the end of the half year. The Healthcare
business line remained at a high level, with teams strongly
committed to the fight against the pandemic. Geographically
speaking, markets are growing in all regions, although some
countries remain vulnerable to the pandemic situation.
Engineering & Construction and Global Markets
& Technologies activities posted strong growth.
The Group’s operating margin rose again sharply, by
+100 basis points, excluding the energy impact. This
improvement reflects the contribution of the structural
margin improvement program, through ongoing recurring
efficiency programs in the amount of 206 million euros, in
line with the annual objective set at more than 400 million euros.
It also illustrates the strong pricing policy, in particular
in Industrial Merchant, active business portfolio management
and is temporarily supported by the effects of the exceptional
cost containment plan, which will diminish with the recovery in
activity.
Net profit rose significantly by +14.9% to more than
1.2 billion euros. The cash flow to sales ratio also
increased and reached 23%. The debt-to-equity ratio
was down sharply versus the end of June 2020.
With almost half of the projects linked to the energy
transition, 12-month investment opportunities are numerous and
total 3 billion euros. Investment decisions for the half
year were high at 1.9 billion euros, including the
acquisition of the Sasol oxygen production plants in Secunda,
South Africa. Solid, diversified and largely focused on the energy
transition, the project backlog totaling 3.1 billion
euros is particularly promising for future growth.
With a growth model combining financial performance with
societal performance, Air Liquide is a major player in a
sustainable future and is particularly committed to developing a
low-carbon society through the reduction of CO2 emissions
and the implementation of hydrogen solutions.
In 2021, in a context of recovery in the second half of the
year, Air Liquide is confident in its ability to further increase
its operating margin and to deliver recurring net profit growth(2),
at constant exchange rates.”
(1) Due to the exceptional impact of the pandemic in the 1st
half of 2020, a comparison with 2019 1st half sales has been
introduced for context in reviewing 1st half 2021 performance. The
comparisons between 2021 and 2019 (over the half year or over the
quarter) are calculated by adding 2020 and 2021 comparable effects.
They are given as a reference point and do not constitute an
alternative performance measure.
(2) Excluding significant and exceptional items with no impact
on recurring operating income. Excluding the impact of a possible
US tax reform in 2021.
Highlights of the 1st quarter
- Sustainable development:
- Presentation of ambitious sustainable
development objectives, based on three pillars:
- ACT for a low-carbon society: Air
Liquide has set itself the goal of achieving carbon neutrality
by 2050, with a 33% reduction in its CO2 emissions by 2035, and
of developing a wide range of low-carbon solutions for its
industrial customers so that they can reduce their own
emissions.
- Work toward better Healthcare by
improving the quality of life of chronic patients in mature
economies and by facilitating access to medical oxygen
for rural communities in low- and middle-income countries.
- Trust as the base to engage with
employees, notably by providing a common basis of care coverage
for 100% of its employees and to adhere to best governance
practices.
- Launch of its first green bond
issue, raising 500 million euros dedicated to several
sustainable development projects, notably in hydrogen and
biogas.
- Partnership with Rothschild & Co and
the Solar Impulse Foundation to launch a 200-million-euro
investment fund to support the development of high-potential
SMEs working on environment-friendly solutions.
- Hydrogen:
- Memorandum of understanding signed
with Airbus and Groupe ADP in preparation for the arrival of
hydrogen at airports by 2035 as part of the development of the
hydrogen-powered aircraft.
- Memorandum of understanding signed
with Siemens Energy to develop high-capacity electrolyzers in
Europe and to sustainably produce low-carbon hydrogen.
- Inauguration of the world’s largest
carbon-free hydrogen production unit based on membrane
electrolysis in Canada, with a capacity of 20 MW.
- Acquisition of a 40% stake in the share
capital of H2V Normandy, with a view to building a low-carbon
hydrogen electrolyzer complex in France with a capacity of up
to 200 MW.
- Supply and installation of eight hydrogen
distribution units for the Daxing Station in Beijing, China —
the largest hydrogen station in the world.
- Completion of the first phase of the
construction of ultra-high purity low-carbon hydrogen electrolyzers
in Taiwan.
- Healthcare:
- Continued mobilization of teams to
the fight against the pandemic all over the world. Contributing to
establishing an airbridge to supply oxygen to Indian
hospitals.
- Industry & Decarbonization:
- Completed the acquisition of 16
Sasol air separation units (ASUs) in Secunda, South Africa, with
the aim to reduce CO2 emissions linked to oxygen production by 30%
to 40% over the next 10 years.
- Memorandum of understanding signed by
Air Liquide, Borealis, Esso S.A.F., TotalEnergies and Yara
International ASA to develop a CO2 capture and storage
infrastructure and contribute to the decarbonization of the
Normandy industrial basin.
- Memorandum of understanding signed with
ArcelorMittal, aimed at implementing solutions to produce
low-carbon steel in Dunkirk.
- First long-term Power Purchase
Agreement for renewable electricity in the Netherlands, for a
total capacity of 25 MW.
- In Kazakhstan, acquisition and
integration by Air Liquide Munay Tech Gases, a 75% subsidiary of
Air Liquide, of the industrial gas production plants of the Atyrau
refinery. ALMTG will operate these production plants for
KazMunayGas under a long-term contract.
- Long-term investments and
contracts to supply industrial gases. In China with BOE, a
world leader in flat panels and an Internet of Things specialist,
as well as with a major producer of flash memory chips, and in
steel with Shagang Group. In Russia with the Severstal steel
company. Together with the chemicals company BASF, for its new
battery materials site in Germany, and in South Korea to increase
hydrogen and carbon monoxide volumes by 20% in the Yeosu industrial
complex.
Group revenue for the 1st half of 2021 totaled 10,846
million euros, up +9.2% on a comparable basis with the
1st half of 2020 which was affected by the public health crisis.
Sales posted strong comparable growth of +15.2% during the 2nd
quarter of 2021 and were up +6% versus the 2nd quarter of 2019.
Engineering & Construction consolidated revenue was up
+65.9% in the 1st half on a comparable basis and Global
Markets & Technologies was up +34.9%. The Group
revenue was up +5.6% as published in the 1st half despite
the strong negative currency impact (-4.8%) and significant scope
impact (-2.8%), which were partly offset by the energy impact
(+4.0%).
Gas & Services revenue amounted to 10,350 million
euros during the 1st half, representing an increase of
+8.0% on a comparable basis. All business lines enjoyed
strong growth, and sales in the 2nd quarter of 2021 were
higher than those in the 2nd quarter of 2019 across all business
lines and all regions. Sales as published for the 1st
half of 2021 were up by +4.3% despite the unfavorable
currency impact (-4.9%) and significant scope impact (-3.0%), which
were partially offset by the energy impact (+4.2%). The significant
scope impact reflects the sale of Schülke in Healthcare and the
reduction or sale of the Group’s stakes in several non-strategic
distributors in Japan. These sales will no longer have an impact
during the 2nd half of 2021.
- Gas & Services revenue in the Americas totaled
4,059 million euros, up +7.3% on a comparable basis
with the 1st half of 2020 which had been down -5.1%. In North
America, all the business lines returned to a close or higher level
in the 2nd quarter than the same period in 2019. In Latin America,
sales enjoyed strong growth in all business lines in the 1st half.
Across the Americas region, Large Industries revenue was up +7.7%
on a comparable basis and Industrial Merchant revenue was up +6.1%.
Healthcare sales increased by +16.9% driven by the medical oxygen
demand and the pick-up in activity in proximity care and Home
Healthcare. Electronics revenue was up +2.7%, thanks to the strong
momentum of Carrier gases sales.
- Revenue in Europe amounted to 3,657 million euros
and was up +7.4% on a comparable basis. Sales in
industrial activities were higher than those in the 1st half of
2019. Large Industries sales (+4.1%) enjoyed strong activity in the
Steel and Chemicals sectors. Industrial Merchant sales were up
+11.3% and reached a higher level than in the 1st half of 2019.
Healthcare (+6.4%) remains committed to fighting the pandemic and
has seen a pick-up in the Home Healthcare business and surgical
activities in hospitals.
- Sales in Asia Pacific increased by +8.7% on a
comparable basis and totaled 2,326 million euros. All
business lines and regions posted growth in the 1st half of 2021,
thanks to a favorable basis of comparison with the 1st half of 2020
which was down -2.1% due to the public health crisis. Volumes were
strong in Large Industries, which enjoyed an increase in revenue of
+9.8%. The strong growth in Industrial Merchant sales (+12.3%) was
mainly driven by high activity in China which posted double-digit
volume growth compared with the 1st half of 2019. In Electronics
(+4.5%), Carrier gases contributed significantly to growth and
benefited from the ramp-up of several units.
- Revenue in the Middle East and Africa region stood at 308
million euros, up by +18.9% on a comparable basis over
the 1st half.
In the 1st half, Healthcare sales posted significant
growth of +9.4% on a comparable basis, with the teams still
fully committed to the fight against Covid-19. Large
Industries revenue was up +7.3% thanks mainly to the
contribution from new facilities and the strong demand from the
Steel and Chemicals sectors. Industrial Merchant sales were
up +8.5% driven by a pick-up in sales volumes, strong
activity in China and a solid +1.9% pricing impact over the half
year. Electronics sales increased by +4.7%, with
Carrier gases sales driven by the ramp-up of new production
units.
Engineering & Construction consolidated revenue were
up +65.9% and stood at 169 million euros in the 1st
half of 2021. Order intake totaled 542 million euros, thanks
to positive momentum in Asia and the energy transition.
Global Markets & Technologies sales totaled 327
million euros, with strong comparable growth of +34.9%
supported notably by the biogas activity and high value added
technological equipment sales.
Efficiencies1 totaled 206 million euros in the 1st
half, up +3.5% and in line with the annual target of more than 400
million euros. Moreover, the exceptional cost containment plan
launched in response to the health crisis was extended and adapted
to the gradual recovery in activity. The impact of these
exceptional measures is expected to fall sharply during the 2nd
half, in line with the expected recovery in activity.
Group Operating Income Recurring (OIR) reached 1,948
million euros in the 1st half of 2021, an increase of +7.4% and
of +17.1% on a comparable basis, which is significantly
higher than the comparable sales growth of +9.2% over the
half-year.
The operating margin (OIR to revenue) stood at
18.0%, representing a marked improvement of +100 basis
points excluding the energy impact compared with the 1st half
of 2020. Gas & services operating margin stood at
20.0%, a significant improvement of +120 basis points
excluding the energy impact. On a reported basis, operating
margin improvement was limited due to a significant increase in
energy prices during the 1st half of 2021, which was contractually
passed through to customers and therefore had a dilutive impact on
the published margin.
The net profit (Group share) amounted to 1,239 million
euros in the 1st half of 2021, an increase of +14.9% as
published and +23.1% excluding the currency impact. The
recurring net profit (Group share)(2) increased by +11.3%
and +19.3% excluding the currency impact. Net earnings
per share stood at 2.63 euros per share and rose sharply
by +14.8% compared with 2.29 euros in the 1st half of
2020.
Cash flow from operating activities before changes in
net working capital amounted to 2,483 million euros
during the 1st half of 2021, representing an increase of +4.8% as
published and +10.0% excluding the currency impact. This
corresponds to a high level of 22.9% of sales compared with
23.1% in the 1st half of 2020, improving by +70 basis points
excluding the energy impact.
Gross industrial capital expenditure amounted to 1,439
million, an increase of +9.0% as published compared with the
1st half of 2020 and of +14.1% excluding the currency impact. This
represented 13.3% of sales, reflecting strong project
development. Financial investments were at 569 million
euros, including approximately 480 million euros for the
acquisition of the 16 Sasol air separation units in South
Africa.
The net debt-to-equity ratio, adjusted for the seasonal
effect of the dividend payment, stood at 56.1%, down sharply
compared with 64.5% at the end of June 2020.
In the 1st half of 2021, industrial and financial investment
decisions totaled 1,908 million euros, up sharply
compared to 1 331 million euros in the 1st half 2020.
The investment backlog remained high at 3.1 billion
euros, evenly distributed across various business sectors and
geographies.
The additional contribution to revenue of unit start-ups
and ramp-ups increased, totaling 130 million euros over the
1st half of 2021. For the year 2021, this contribution is
estimated at 320 million euros, including 70 million
from the acquisition of the 16 Sasol units in South Africa.
The 12-month portfolio of investment opportunities stood
at 3.0 billion euros at the end of June 2021. The energy
transition represents 45% of this portfolio and includes
several projects for low-carbon hydrogen production by
electrolysis, hydrogen liquefaction and carbon capture and storage
(“CCS”) in Large Industries.
The return on capital employed after tax (ROCE) was
9.5% for the 1st half of 2021. Recurring ROCE3 stood
at 9.0%, an increase of +60 basis points compared
with the 1st half of 2020.
Table of Contents
H1 2021 PERFORMANCE 7
Key Figures 7
Income Statement 8
Change in Net debt 16
INVESTMENT CYCLE 17
RISK FACTORS 19
OUTLOOK 19
APPENDICES 20
Performance indicators 20
Calculation of performance indicators (Semester) 21
Calculation of performance indicators (Quarter) 24
2nd quarter 2021 revenue 24
Geographic and segment information 25
Consolidated income statement 25
Consolidated balance sheet 26
Consolidated cash flow statement 27
H1 2021 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.
Due to the exceptional impact of the pandemic in the 1st half of
2020, a comparison with 2019 1st half sales has been introduced for
context in reviewing 1st half 2021 performance. The comparisons
between 2021 and 2019 (over the half year or over the quarter) are
calculated by adding 2020 and 2021 comparable effects. They are
given as a reference point and do not constitute an alternative
performance measure. The comparable growths mentioned below are
calculated compared to the same period of 2020 except when 2019 is
mentioned.
Key Figures
(in millions of euros)
H1 2020
H1 2021
2021/2020 published
change
2021/2020 comparable change
(a)
Total Revenue
10,273
10,846
+5.6%
+9.2%
Of which Gas & Services
9,920
10,350
+4.3%
+8.0%
Operating Income Recurring (OIR)
1,813
1,948
+7.4%
+17.1%
Group OIR Margin
17.6%
18.0%
+40 bps
Variation excluding energy
+100 bps
Other Non-Recurring Operating Income and
Expenses
(92)
(40)
Net Profit (Group Share)
1,078
1,239
+14.9%
Net Profit Recurring (Group Share) (b)
1,113
1,239
+11.3%
Earnings per Share (in euros)
2.29
2.63
+14.8%
Cash flow from operating activities before
changes in net working capital
2,371
2,483
+4.8%
Net Capital Expenditure (c)
1,309
1,913
Net Debt
€13.2 bn
€12.0 bn
Net Debt to Equity ratio (d)
64.5%
56.1%
Return on Capital Employed after tax -
ROCE
8.3%
9.5%
+120 bps
Recurring ROCE (e)
8.4%
9.0%
+60 bps
(a) Change excluding the currency, energy (natural gas and
electricity) and significant scope impacts, see reconciliation in
appendix.
(b) Excluding exceptional and significant transactions that have
no impact on the operating income recurring, see reconciliation in
appendix.
(c) Including transactions with minority shareholders.
(d) Adjusted to spread the dividend payment in 1st half out over
the full year.
(e) Based on the recurring net profit, see reconciliation in
appendix.
Income Statement
REVENUE
Revenue
(in millions of euros)
H1 2020
H1 2021
2021/2020 published
change
2021/2020 comparable
change
Gas & Services
9,920
10,350
+4.3%
+8.0%
Engineering & Construction
104
169
+61.9%
+65.9%
Global Markets & Technologies
249
327
+31.6%
+34.9%
TOTAL REVENUE
10,273
10,846
+5.6%
+9.2%
Revenue by quarter
(in millions of euros)
Q1 2021
Q2 2021
Gas & Services
5,103
5,247
Engineering & Construction
76
93
Global Markets & Technologies
155
172
TOTAL REVENUE
5,334
5,512
2021/2020 Group published
change
-0.7%
+12.4%
2021/2020 Group comparable
change
+3.8%
+15.2%
2021/2020 Gas & Services comparable
change
+2.8%
+13.7%
Group
Group revenue for the 1st half of 2021 totaled 10,846
million euros. This represented an increase of +9.2% on
a comparable basis with the 1st half of 2020 which was affected by
the public health crisis. Sales posted strong growth of +15.2%
during the 2nd quarter of 2021 and were up +6% versus the 2nd
quarter of 2019. Engineering & Construction consolidated
revenue was up +65.9% compared with an activity level which
was slower due to the pandemic during the 1st half of 2020.
Global Markets & Technologies was up +34.9%,
mainly driven by strong momentum in the biogas business. The Group
revenue was up +5.6% as published despite the strong
negative currency impact (-4.8%) and significant scope impact
(-2.8%), which were partly offset by the energy impact (+4.0%).
Gas & Services
Gas & Services revenue amounted to 10,350 million
euros during the 1st half, representing an increase of
+8.0% on a comparable basis. All business lines enjoyed
strong growth, and sales in the 2nd quarter of 2021 were
higher than those in the 2nd quarter of 2019 across all business
lines (Large industries +6%, Industrial Merchant +1%,
Healthcare +16% and Electronics +8%) and all regions
(Americas +4%, Europe +7%, Asia-Pacific +6%, Middle-East and Africa
+8%). Healthcare sales posted significant growth of
+9.4%, with the teams still fully committed to the fight
against Covid-19. Large Industries revenue was up
+7.3% thanks mainly to the contribution from new facilities
and the strong demand from the Steel and Chemicals sectors.
Industrial Merchant sales were up +8.5% driven by a
pick-up in volumes, strong activity in China and a solid +1.9%
pricing impact over the half year. Electronics sales
increased by +4.7% and by +5.2% excluding Equipment &
Installations sales, with Carrier gases sales driven by the ramp-up
of new units. Sales as published for the 1st half of 2021 were up
by +4.3% despite the unfavorable currency impact (-4.9%) and
significant scope impact (-3.0%), which were partially offset by
the energy impact (+4.2%). The significant scope impact reflects
the sale of Schülke in Healthcare and the reduction or sale of the
Group’s stakes in several non-strategic distributors in Japan.
These sales will no longer have an impact during the 2nd half of
2021.
Revenue by geography and business
line
(in millions of euros)
H1 2020
H1 2021
2021/2020 published
change
2021/2020 comparable
change
Americas
3,975
4,059
+2.1%
+7.3%
Europe
3,440
3,657
+6.3%
+7.4%
Asia-Pacific
2,236
2,326
+4.0%
+8.7%
Middle East & Africa
269
308
+15.0%
+18.9%
GAS & SERVICES REVENUE
9,920
10,350
+4.3%
+8.0%
Large Industries
2,430
2,916
+20.0%
+7.3%
Industrial Merchant
4,509
4,595
+1.9%
+8.5%
Healthcare
1,959
1,835
-6.3%
+9.4%
Electronics
1,022
1,004
-1.7%
+4.7%
Americas
Gas & Services revenue in the Americas totaled 4,059
million euros in the 1st half of 2021, up +7.3% compared
with the 1st half of 2020 which had been down -5.1%. In North
America, all the business lines returned to a close or higher level
in the 2nd quarter than the same period in 2019. In Latin America,
sales enjoyed strong growth in all business lines. Across the
Americas region, Large Industries revenue was up +7.7%, while
Industrial Merchant revenue was up +6.1%. Healthcare sales
increased by +16.9% driven by exceptionally high medical oxygen
demand due to the pandemic and the pick-up in activity in proximity
care in the United States and Home Healthcare in Canada and Latin
America. Electronics revenue was up +2.7%, thanks to the strong
momentum of Carrier gases sales.
Americas Gas & Services H1 2021 Revenue
- Large Industries revenue increased by +7.7%
during the 1st half. In the United States at the end of June, air
separation units were operating at full capacity, driven by the
strong oxygen demand for Steel and Chemicals following the slowdown
caused by the winter storm on the Gulf Coast in February. Hydrogen
demand for Refining increased during the 2nd quarter and volumes
returned to levels close to those seen in the 2nd quarter of 2019.
In Latin America, oxygen and hydrogen volumes were up markedly, due
mainly to the ramp-up of new hydrogen units in Argentina and
Mexico.
- Industrial Merchant sales were up +6.1% in the
1st half. In the United States, after having been affected by a
winter storm in February, gas sales continued to recover, returning
to levels higher than in the 1st half of 2019, whereas hardgoods
sales remained below. Sales to consumer markets such as Food,
Pharmaceuticals and Research were higher than in 2019, sales to the
Metal Fabrication, Energy and Materials markets were also up, while
sales to the Non-residential construction sector remained sluggish.
In Latin America, business momentum was strong and sales were
higher than pre-pandemic levels, in particular with respect to
liquid gases in Argentina and Mexico and cylinder gases in Brazil.
Pricing impacts sequentially rose during the 2nd quarter following
pricing campaigns launched at the beginning of the year, up +2.7%
over the half year.
- Healthcare revenue was up +16.9% in the 1st half
with exceptionally high medical oxygen sales across the region,
particularly in Latin America during the 2nd quarter as part of the
fight against the pandemic. In the United States, the proximity
care business returned to normal, with elective surgery gradually
restarting. Home Healthcare posted strong growth in Latin America,
particularly oxygen therapy in Brazil and Argentina in the 2nd
quarter; activity picked up in Canada where the reopening of
clinics meant new patients were prescribed home-based therapies, in
particular for sleep apnea.
- Electronics sales were up +2.7% in the 1st half
and by +5.0% excluding Equipment & Installations. Sales of
carrier gases and Specialty Materials enjoyed double-digit growth,
which was partly offset by a decline in Equipment &
Installation sales.
Europe
Revenue in Europe was up +7.4% and amounted to 3,657
million euros. Industrial sales were higher than those in the
1st half of 2019. Large Industries sales (+4.1%) enjoyed strong
activity in the Steel and Chemicals sectors. Industrial Merchant
sales were up +11.3% and reached a higher level than in the 1st
half of 2019. Accounting for more than a third of Gas and Services
sales in Europe, Healthcare (+6.4%) remains committed to fighting
the pandemic and has seen a pick-up in the Home Healthcare business
and surgical activities in hospitals.
Europe Gas & Services H1 2021
Revenue
- Large Industries sales were up +4.1%, driven by
strong demand in Steel and Chemicals, particularly in Germany where
volumes have returned to the levels of the 1st half of 2019, thanks
notably to the recovery of the Automobile sector. Hydrogen demand
for Refining saw a significant sequential improvement in Benelux
and France but remained weak in Southern Europe. Sales were up in
Eastern Europe thanks to strong demand for oxygen in Poland and the
acquisition of a hydrogen production unit in Kazakhstan in the 1st
quarter.
- Industrial Merchant revenue posted strong growth of
+11.3%. All markets were well oriented and volumes exceeded
those of the 1st half of 2019. Liquid gas sales were strong in the
2nd quarter, with volumes up sharply compared with the 2nd quarter
of 2019 in France and Italy. The business line enjoyed strong
growth in the East of Europe, notably in Poland, Russia and Turkey.
Pricing impacts were up sequentially in the 2nd quarter, taking the
average over the half year to +1.3%.
- In Healthcare—a business line that remains committed to
fighting Covid-19—sales were up +6.4% in the 1st half.
Medical gases revenue increased across Europe, supported by the
combined impact of the pandemic and the pick-up in surgical
activities in hospitals. Equipment sales gradually returned to
normal and are to compare with 2020 revenue which was exceptionally
high. This basis of comparison is expected to ramp up during the
second part of 2021, with volumes of medical oxygen and equipment
supplied to hospitals having reached record-high levels during the
2nd half of 2020. The recovery accelerated in the Home Healthcare
business, driven by a wider offering for diabetes treatment in
France and its launch in new countries such as Germany and the
United Kingdom. A pick-up in prescriptions for sleep apnea also
contributed to this momentum, notably in France, the Iberian
Peninsula and Germany. Finally, Seppic sales were up sharply due to
strong demand for specialty ingredients for cosmetics and adjuvants
for poultry and swine vaccines.
Europe
- Air Liquide, Borealis, Esso,
TotalEnergies and Yara have signed a Memorandum of Understanding
(MoU) to explore the development of a CO2 infrastructure
including capture and storage, to help decarbonize the
industrial basin located in the Normandy region, France. With the
objective to reduce CO2 emissions by up to 3 million tons per
year by 2030, which is equivalent to the emissions of more than
1 million passenger cars, the first phase will consist in studying
the technical and economical feasibility of this project. This
partnership, which will seek funding from European, French and
Regional schemes, is open to other industrial parties.
- Air Liquide and PAO Severstal, one of the
leading steel producers, have signed a new long-term
contract for the supply of oxygen to the Severstal CherMK site
in Russia. Air Liquide will invest around 60 million euros
in the construction of a state-of-the-art Air Separation Unit (ASU)
on the site, one of the largest oxygen sites in continental Europe,
where it already owns three other ASUs. Thanks to enhanced energy
efficiency, this new unit will improve the overall environmental
footprint of the site.
Asia-Pacific
Sales in Asia Pacific increased by a very strong +8.7%
and totaled 2,326 million euros. All business lines and
regions posted growth in the 1st half of 2021, thanks to a
favorable basis of comparison with the 1st half of 2020 which was
down -2.1% due to the public health crisis. China accounted for a
large portion of this growth, with significant volumes across all
business lines. Volumes, particularly in China, South Korea and
Singapore, were strong in Large Industries, which enjoyed an
increase in revenue of +9.8%. The strong growth in Industrial
Merchant sales (+12.3%) was mainly driven by high activity in China
which posted double-digit volume growth compared with the 1st half
of 2019. In Electronics (+4.5%), Carrier gases contributed
significantly to growth and benefited from the ramp-up of several
units.
Asia-Pacific Gas & Services H1 2021
Revenue
- Large Industries sales were up +9.8%, compared
with sales that were down -2.0% during the 1st half of 2020. Growth
was mainly driven by strong air gases demand for Steel and
Chemicals in China. The oxygen sales for Steel in Japan were high,
in particular during the 2nd quarter. Hydrogen volumes also
increased, particularly for Refining in Singapore and for Chemicals
in South Korea with the ramp-up of a new unit.
- Industrial Merchant revenue increased by +12.3%
with sales up across all regions. It had decreased by -5.8% during
the 1st half of 2020. Volumes were up compared with the 1st half of
2019, driven by China where all products enjoyed strong demand,
particularly with regard to domestic needs in the Metal
Fabrication, Electronic Components and Automobile sectors.
Excluding China, volumes continued to improve in all countries, in
particular for liquid gas in developing economies which exceeded
the level seen in the 2nd quarter of 2019. Pricing impacts were
stable (-0.3%).
- Electronics sales were up +4.5% and +5.0%
excluding Equipment & Installation sales. Carrier gases enjoyed
strong growth of +8%, thanks notably to the ramp-up of several
production plants for customers in China and Japan. Advanced
materials sales were up over the half year and benefited from
exceptional volumes in June which offset the price discounts
granted to customers signing medium-term contracts, in anticipation
of an increase in volumes.
Asia-Pacific
- Air Liquide will invest around 70
million euros to build a state-of-the-art gases plant in Wuhan
to supply a major memory chipmaker. Air Liquide has been producing
ultra-pure industrial gases for this leading Chinese high-tech
company for more than 12 years. The unit is planned to be
operational in 2022.
- Air Liquide and Jiangsu Shagang Group,
the largest private steel enterprise in China and one of top 5
globally, have signed a new long-term agreement for the supply
of industrial gases in Zhangjiagang City, Jiangsu Province,
China. Air Liquide will invest around 100 million euros
towards the construction of a world-scale Air Separation Unit
(ASU) on the site, where it already operates two other ASUs.
Designed to use low carbon energy, this state of the art plant will
allow to significantly reduce CO2 emissions over time. This
new ASU will also be a new source of krypton and
xenon to address the growing demand of the Electronics
industry, as well as other air gases for our industrial merchant
activity in China.
Middle East and Africa
Revenue in the Middle East and Africa region stood at 308
million euros, up sharply by +18.9% over the 1st half.
Large Industries sales enjoyed an increase in demand from customers
linked to the pipeline network in Saudi Arabia and a favorable
basis of comparison due to a customer maintenance turnaround in the
1st quarter of 2020. Industrial Merchant revenue continued to grow.
The Healthcare business is committed to the fight against Covid-19,
and sales growth was strong across the region.
Engineering & Construction
Engineering & Construction consolidated revenue was up
+65.9% and stood at 169 million euros in the 1st half
of 2021. Order intake totaled 542 million euros, up sharply
thanks to positive momentum in Asia and the energy transition. This
notably included a major liquid hydrogen production project as well
as the sale of a license and engineering services for a carbon
capture unit using CryoCapTM technology in Europe.
Global Markets & Technologies
Global Markets & Technologies sales totaled 327 million
euros, with strong growth of +34.9% compared with the
weak level of activity during the 1st half of 2020. The biogas
activity was strong, driven in Europe by the ramp-up of production
plants and by sales of biomethane for transport, and in the United
States by the increase in sales prices. Equipment sales were also
up, in particular for aerospace in Europe, for biogas production in
the United States and for hydrogen mobility.
Order intake for Group projects and third-party customers
totaled 346 million euros and notably included major
contracts for helium cryogenic refrigerators, LNG reliquefaction
units on tankers and gas purification membranes.
Global Markets &
Technologies
- Air Liquide, Airbus and Groupe ADP have
signed a Memorandum of Understanding (MoU) to prepare for
the arrival of hydrogen in airports by 2035 as part of the
development of hydrogen-powered commercial aircraft. The partners
will leverage their respective expertise to support the
decarbonization of the aviation industry and to define the concrete
needs and opportunities that hydrogen can bring to the aeronautics
sector. This partnership reflects the three partners’ shared
ambition to contribute to the emergence of an innovative and
strategic French sector dedicated to achieving climate-neutral
aviation worldwide.
OPERATING INCOME RECURRING
Operating income recurring before depreciation and
amortization totaled 2,997 million euros, an increase of
+3.4% and +8.8% excluding the currency impact compared with
the 1st half of 2020. Excluding the currency impact,
personnel costs were up +2.0% and purchases
increased by +17.5%. The strong growth in purchases mainly
reflected the recovery in activity, with energy purchases combining
an increase in volumes with a marked price increase, which is
contractually passed through to customers. With activity picking up
again, other expenses increased by +9.7% excluding
the currency impact, and notably included higher transportation and
maintenance expenses, in particular relating to the management of
an unusual winter storm along the Gulf Coast in February 2021.
Costs relating to the Covid-19 pandemic are included in operating
expenses. Depreciation and amortization reached 1,049
million euros, representing a moderate increase of +0.9%
excluding the currency impact, with the impact of the start-up
of new units partially offset by the sale of Schülke in 2020.
Ongoing efficiency and margin improvement programs and the
exceptional cost containment plan launched by the Group in response
to the Covid-19 crisis, contributed significantly to improving
performance. Group Operating Income Recurring (OIR) reached
1,948 million euros in the 1st half of 2021, an increase of
+7.4% and of +17.1% on a comparable basis, which is much
higher than the comparable sales growth of +9.2% over the
half-year. The operating margin (OIR to revenue) stood at
18.0%, representing a marked improvement of +100 basis
points excluding the energy impact compared with the 1st half
of 2020. On a reported basis, the improvement of operating margin
was limited due to a significant increase in energy prices during
the 1st half of 2021, which was contractually passed through to
customers and therefore had a dilutive impact on the published
margin.
Efficiencies4 totaled 206 million euros, up +3.5%
and in line with the annual target of more than 400 million euros.
These efficiencies represent cost savings of 2.8%, an increase
compared with 2.5% in the 1st half of 2020. Industrial
efficiencies accounted for more than 40% of total efficiencies
and included improvement of energy efficiency in Large
Industries and of the supply chain in Industrial Merchant
and Electronics. The implementation of digital tools aimed
at the Group’s transformation continued, with the
acceleration of the roll-out of remote operation centers for Large
Industries production units (Smart Innovative Operations, SIO) and
new optimization tools for delivery routes in Industrial Merchant
(Integrated Bulk Operations, IBO). Shared services centers
are developing and efficiencies related to purchases
continued, in particular at Airgas, which represents a major
contribution to overall efficiencies generated.
Moreover, the exceptional cost containment plan launched in
response to the health crisis was extended and adapted to the
gradual recovery in activity, due to the continuation of local
lockdown measures during the 1st half of the year. The impact of
these exceptional measures is expected to fall sharply during the
2nd half, in line with the expected recovery in activity.
Gas & Services
Gas & Services H1 2021 Operating Income
Recurring
Gas & Services operating income recurring totaled
2,066 million euros, up +6.1% as published compared
with the 1st half of 2020, and up +14.9% on a comparable
basis. The operating margin as published stood at
20.0%, a significant improvement of +120 basis points
excluding the energy impact compared with the 1st half of 2020.
On a reported basis, operating margin improvement was limited due
to a significant increase in energy prices during the 1st half of
2021, which was contractually passed through to customers and
therefore had a dilutive impact on the published margin.
Industrial Merchant activity prices were up +1.9% in the 1st
half, notably thanks to pricing campaigns launched at the beginning
of the year, in particular in the United States and Europe. Prices
were almost flat in Healthcare and down slightly in Electronics due
to Advanced Materials price discounts granted to customers signing
medium-term contracts, in anticipation of a strong increase in
volumes.
Gas & Services Operating margin
(a)
H1 2020
H1 2021
H1 2021, excluding energy
impact
Americas
18.7%
19.7%
20.6%
Europe
19.8%
18.9%
20.1%
Asia-Pacific
21.7%
22.1%
22.2%
Middle East & Africa
14.3%
19.3%
19.6%
TOTAL
19.6%
20.0%
20.8%
(a) Operating income recurring / revenue as published
Operating income recurring in the Americas reached 802
million euros over the 1st half of 2021, an increase of
+7.8%. Excluding the energy impact, the operating margin
stood at 20.6%, representing a very strong +190 basis
points increase compared with the 1st half of 2020. The
efficiency plan made a significant impact, coupled with the
continuation during the 1st quarter of the exceptional cost
containment plan launched in response to the health crisis, in
particular in Large Industries and the Industrial Merchant
business. Airgas’ contribution was significant, driven by a pick-up
in volumes, favorable mix effects and dynamic pricing
management.
Operating income recurring in Europe reached 692
million euros, an increase of +1.7% compared with the
1st half of 2020. Excluding the energy impact, the operating margin
was 20.1%, an increase of +30 basis points. This
performance was driven by the efficiency program and a recovery in
volumes, mainly in Large Industries and the Industrial Merchant
business.
Operating income recurring in Asia Pacific stood at
513 million euros, an increase of +6.0%. The
operating margin excluding the energy impact reached 22.2%,
an increase of +50 basis points. Electronics generated major
efficiencies and benefited from the results of the Group’s active
business portfolio management in Japan. Industrial Merchant growth
in China also contributed to the improvement in performance,
notably via efficiency measures and the acceleration in sales of
cylinder gas and small on-site gas production units.
Operating income recurring for the Middle East and Africa
region amounted to 60 million euros, representing a marked
increase of +55.1% compared with the 1st half of 2020.
Excluding the energy impact, the operating margin was 19.6%,
up +530 basis points due to the strong increase in volumes
across all activities, in particular in Large Industries in Saudi
Arabia, where there was a customer maintenance turnaround at a
major hydrogen production unit during the 1st quarter of 2020.
Engineering & Construction
Engineering & Construction operating income recurring
stood at 8 million euros for the 1st half of 2021,
representing 4.5% of sales.
Global Markets & Technologies
Operating income recurring for Global Markets &
Technology stood at 40 million euros in the 1st half of
2021, with an operating margin at 12.2%, an increase of
+240 basis points.
Research & Development and Corporate costs
Research & Development expenses and Corporate costs totaled
166 million euros.
NET PROFIT
Other operating income and expenses showed a net balance
of -40 million euros and mainly consisted of reorganization costs.
This compares to -92 million euros in the 1st half of 2020, which
included exceptional expenses relating to the management of the
Covid-19 pandemic.
The financial result was -188 million euros
compared with -216 million euros in the 1st half of 2020, a
decrease that is primarily due to net finance costs of
-141 million euros, down -17.5%. The early redemption
in December 2020 of bonds (“senior notes”) issued by Airgas before
its acquisition by Air Liquide and the decrease in average
outstanding bond issues compared with the 1st half of 2020
contributed to reducing net finance costs. The average cost of
net debt was 2.9%, flat compared with the 1st half of
2020.
Income tax expense was 425 million euros. The
effective tax rate was 24.7%, down slightly from 25.3% in
the 1st half of 2020.
The share of profit of associates amounted to -1.6
million euros. The share of minority interests in net
profit totaled 54 million euros, up +16.4% due to business
picking up at subsidiaries with minority shareholders.
The net profit (Group share) amounted to 1,239 million
euros in the 1st half of 2021, an increase of +14.9% and
+23.1% excluding the currency impact.
The recurring net profit (Group share)(5) was identical
to the net profit (Group share) at 1,239 million euros. It
increased by +11.3% and +19.3% excluding the currency
impact, which is significantly higher than the comparable sales
growth of +9.2% over the half year.
Net earnings per share also rose sharply by +14.8%
compared with the 1st half of 2020, in line with the increase in
net profit (Group share). It stood at 2.63 euros per share
compared with 2.29 euros per share in the 1st half of 2020. The
average number of outstanding shares used for the calculation of
net earnings per share as of June 30, 2021 was
471,986,824.
Change in the number of shares
H1 2020
H1 2021
Average number of outstanding shares
471,411,633
471,986,824
Change in Net debt
Cash flow from operating activities before changes in
net working capital amounted to 2,483 million euros
during the 1st half of 2021, representing an increase of +4.8% and
+10.0% excluding the currency impact. This corresponds to a
high level of 22.9% of sales compared with 23.1% in the 1st
half of 2020, an improvement of +70 basis points excluding the
energy impact.
Working capital requirement (WCR) was up 267 million
euros compared with December 31, 2020 due to the pick-up in
activity during the half-year. The WCR excluding taxes to sales
ratio was 3.7%, compared with 5.0% at June 30, 2020. Net
cash flow from operating activities after changes in working
capital requirement amounted to 2,190 million euros, an
increase of +1.7% and +6.5% excluding the currency impact
compared with the 1st half of 2020.
Gross capital expenditure totaled 2,008 million
euros. Gross industrial capital expenditure amounted to 1,439
million, an increase of +9.0% compared with the 1st half of 2020
and of +14.1% excluding the currency impact. This represented
13.3% of sales, reflecting strong project development.
Financial investments were particularly high at 569 million euros,
including approximately 480 million euros for the acquisition of 16
Sasol air separation units in South Africa. Proceeds from the
sale of fixed assets and activities stood at 129 million
euros and included in particular the disposal of the Group’s
activities in Greece, highlighting the Group’s active business
portfolio management. Net capital expenditure6 totaled
1,913 million euros.
Net debt at June 30, 2021 reached 12,013 million
euros, a decrease of 1,163 million euros compared with June 30,
2020 and an increase of 1,404 million euros compared with December
31, 2020 following the payment of more than 1.3 billion euros in
dividends in May and the major acquisition of Sasol air gases
production units in South Africa in June. The net debt-to-equity
ratio, adjusted for the seasonal effect of the dividend
payment, stood at 56.1%, down sharply compared with
end of June 2020 (64.5%).
The return on capital employed after tax (ROCE) was
9.5% for the 1st half of 2021. Recurring ROCE7 stood
at 9.0%, an increase of +60 basis points compared
with the 1st half of 2020.
Financing
- On May 19, 2021, Air Liquide successfully launched its first
green bond issue, by raising 500 million euros (10
years maturity) which will be dedicated to financing and
refinancing the development of several sustainable projects,
in particular in hydrogen, biogas and oxygen. This operation is in
line with the “Sustainable Financing Framework” published on May 17
and validated by a Second-Party opinion. This new bond issue will
notably contribute to the financing of the ambitious sustainable
projects the Group announced on March 23, 2021. At the same time,
Air Liquide undertakes to publish, annually until the funds raised
are fully allocated, a "Sustainable Financing Reporting", which
will include an allocation report and an impact report, both
audited and made public on the Air Liquide website.
INVESTMENT CYCLE
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
In the 1st half of 2021, industrial and financial investment
decisions totaled 1,908 million euros, including 479
million euros for the acquisition of Sasol’s 16 air separation
units in South Africa, which was finalized at the end of June. This
was up sharply from 1,331 million euros in the 1st half of
2020.
Industrial investment decisions were high in the 2nd
quarter of 2021, and totaled 1,349 million euros for the 1st
half of 2021. Investment was dynamic in Large Industries, in
particular with long-term contracts having been signed in the 2nd
quarter for new air separation units in China and Russia. Decisions
concerning Industrial Merchant activity included the
launching of Qlixbi for welding in new Northern European countries
and investments contributing to improve margins. The Hydrogen
Energy business remained very active, with new investments for
the supply chain in the United States and for the expansion of a
filling center in Europe. In the 1st half of 2021, 11% of
industrial decisions contributed to efficiency programs.
Financial investment decisions totaled 559 million
euros in the 1st half of 2021, including 479 million euros for
the acquisition of the Sasol units in South Africa. This also
includes several small acquisitions, notably in the Healthcare
business in Europe and in the Industrial Merchant business in North
America, Europe and Asia.
The investment backlog remained high at 3.1 billion
euros, evenly distributed across various business sectors and
geographies (Americas 41%, Asia-Pacific 34%, Europe 25%). This
consists of approximately 70 projects with an average value of 45
million euros. The largest proportion (58%) of these projects
relates to Large Industries, bolstered by the energy
transition. The proportion of Electronics projects remains
high (23%). The Chemicals (29%) and Steel (21%) sectors together
were half of the backlog. Investments in the Oil & Gas sector
were only 8% of total investments. The investment backlog is
expected to lead to a future contribution to annual revenue of
approximately 1.0 billion euros per year after the full
ramp-up of the units, which is an identical amount to that at the
end of 2020.
Investment
- Air Liquide has finalized the
acquisition of Sasol’s 16 Air Separation Units (ASU)
located in Secunda, South Africa. Air Liquide will operate this
site - the biggest oxygen production site in the world - with a
plan to reduce its CO2 emissions by 30% to 40% within the
next ten years. The initial investment is approximately 8 billion
South African Rand (circa 480 million euros).
- Air Liquide partnered with Rothschild
& Co and the Solar Impulse Foundation (“SIF”) to launch a
200 million euros investment fund. This vehicle’s
strategy will be to scale up companies that develop
environment-friendly solutions.
START-UPS
Nine major units were started up during the 1st half of
2021. These include carrier gases production units for
Electronics in Asia and the United States, air separation
units for the Industrial Merchant business in the United
States and production units for Large Industries in Canada,
Belgium and Kazakhstan.
The additional contribution to revenue of unit start-ups
and ramp-ups is high, totaling 130 million euros over the
1st half of 2021. For the year 2021, the additional contribution
to revenue is estimated at 320 million euros, including
70 million from the acquisition of the 16 Sasol oxygen units
in South Africa. These 16 units are expected to generate between
400 and 450 million euros per year in revenue in a second phase
that fully integrates energy management, with no significant impact
on operating income.
INVESTMENT OPPORTUNITIES
The 12-month portfolio of investment opportunities stood
at 3.0 billion euros at the end of June 2021.
The energy transition represents 45% of the
portfolio of opportunities and includes several projects for
low-carbon hydrogen production by electrolysis, hydrogen
liquefaction and carbon capture and storage (“CCS”) in Large
Industries. The share of Electronics projects remains
high, up slightly from the already high level in the 1st quarter of
2021.
Europe and Asia account for nearly 80% of opportunities: Europe
remained the leading region in the portfolio owing to the numerous
projects linked to the energy transition, followed by
Asia, where most Electronics projects are being
carried out. The Americas and the Middle East & Africa regions
then follow.
RISK FACTORS
There was no change in risk factors during the first half. Risk
factors are described in the 2020 Reference Document on pages 74 to
90.
OUTLOOK
This first half excellent performance reflects the
momentum of our markets and the acceleration in sales in the 2nd
quarter. These exceeded the level seen in 2nd quarter of 2019(1),
across all regions and for all activities. Sales for the half
year were close to 11 billion euros, marking strong growth
of +9.2% on a comparable basis, versus the 1st half of
2020.
In Gas & Services, the rebound in industrial
activities was particularly strong in the 2nd quarter, both in
Large Industries and Industrial Merchant. Electronics also recorded
strong growth at the end of the half year. The Healthcare
business line remained at a high level, with teams strongly
committed to the fight against the pandemic. Geographically
speaking, markets are growing in all regions, although some
countries remain vulnerable to the pandemic situation.
Engineering & Construction and Global Markets
& Technologies activities posted strong growth.
The Group’s operating margin rose again sharply, by
+100 basis points, excluding the energy impact. This
improvement reflects the contribution of the structural
margin improvement program, through ongoing recurring
efficiency programs in the amount of 206 million euros, in
line with the annual objective set at more than 400 million euros.
It also illustrates the strong pricing policy, in particular
in Industrial Merchant, active business portfolio management
and is temporarily supported by the effects of the exceptional
cost containment plan, which will diminish with the recovery in
activity.
Net profit rose significantly by +14.9% to more than
1.2 billion euros. The cash flow to sales ratio also
increased and reached 23%. The debt-to-equity ratio
was down sharply versus the end of June 2020.
With almost half of the projects linked to the energy
transition, 12-month investment opportunities are numerous and
total 3 billion euros. Investment decisions for the half
year were high at 1.9 billion euros, including the
acquisition of the Sasol oxygen production plants in Secunda,
South Africa. Solid, diversified and largely focused on the energy
transition, the project backlog totaling 3.1 billion
euros is particularly promising for future growth.
With a growth model combining financial performance with
societal performance, Air Liquide is a major player in a
sustainable future and is particularly committed to developing a
low-carbon society through the reduction of CO2 emissions and
the implementation of hydrogen solutions.
In 2021, in a context of recovery in the second half of the
year, Air Liquide is confident in its ability to further increase
its operating margin and to deliver recurring net profit growth(2),
at constant exchange rates.
(1) Due to the exceptional impact of the pandemic in the 1st
half of 2020, a comparison with 2019 1st half sales has been
introduced for context in reviewing 1st half 2021 performance. The
comparisons between 2021 and 2019 (over the half year or over the
quarter) are calculated by adding 2020 and 2021 comparable effects.
They are given as a reference point and do not constitute an
alternative performance measure.
(2) Excluding significant and exceptional items with no impact
on recurring operating income. Excluding the impact of a possible
US tax reform in 2021.
APPENDICES
Performance indicators
Performance indicators used by the Group that are not directly
defined in the financial statements have been prepared in
accordance with the AMF position 2015-12 about alternative
performance measures.
The performance indicators are the following:
- Currency, energy and significant scope impacts
- Comparable sales change and comparable operating income
recurring change
- Operating margin and operating margin excluding energy
- 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.
Calculation of performance indicators (Semester)
COMPARABLE SALES CHANGE AND COMPARABLE OPERATING INCOME
RECURRING CHANGE
Comparable changes for sales and operating income recurring
exclude the currency, energy and significant scope impacts
described above.
(in millions of euros)
H1 2021
H1 2021/2020 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
H1 2021/2020 Comparable
Growth
Revenue
Group
10,846
+5.6%
(498)
304
114
(271)
+9.2%
Impacts in %
-4.8%
+2.9%
+1.1%
-2.8%
Gas & Services
10,350
+4.3%
(486)
304
114
(271)
+8.0%
Impacts in %
-4.9%
+3.0%
+1.2%
-3.0%
Operating Income Recurring
Group
1,948
+7.4%
(109)
-
-
(56)
+17.1%
Impacts in %
-6.0%
-
-
-3.7%
Gas & Services
2,066
+6.1 %
(106)
-
-
(56)
+14.9%
Impacts in %
-5.5%
-
-
-3.3%
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 energy
corresponds to the operating income recurring, not affected by the
indexation effect of electricity and natural gas, divided by
revenue excluding the energy impact.
H1 2021
Natural gas impact
Electricity impact
H1 2021, excluding energy
impact
Revenue
Group
10,846
292
110
10,444
Gas & Services
10,350
292
110
9,949
Operating Income Recurring
Group
1,948
-
-
1,948
Gas & Services
2,066
-
-
2,066
Operating Margin
Group
18.0%
18.6%
Gas & Services
20.0%
20.8%
RECURRING NET PROFIT GROUP SHARE AND RECURRING NET PROFIT
GROUP SHARE EXCLUDING CURRENCY IMPACT
The recurring net profit Group share corresponds to the net
profit Group share excluding exceptional and significant
transactions that have no impact on the operating income
recurring.
H1 2020
H1 2021
H1 2021/2020 Change
(A) Net Profit (Group Share) - As
Published
1,078.4
1,239.3
+14.9%
(B) Exceptional and significant
transactions after-tax with no impact on OIR
- Exceptional expenses linked to the
management of the Covid-19 pandemic
(34.7)
(A) - (B) = Net Profit Recurring (Group
Share)
1,113.1
1,239.3
+11.3%
(C) Currency impact
(88.7)
(A) - (B) - (C) = Net Profit Recurring
(Group Share) excluding currency impact
1,328.0
+19.3%
NET PROFIT EXCLUDING IFRS16 AND NET PROFIT RECURRING
EXCLUDING IFRS16
Net Profit excluding IFRS16:
H1 2020
FY 2020
H1 2021
(A) Net Profit as Published
1,124.6
2,528.0
1,293.1
(B) = IFRS16 Impact(1)
(6.8)
(13.2)
(6.0)
(A) - (B) = Net Profit excluding
IFRS16
1,131.4
2,541.2
1,299.1
(1) The IFRS16 impact includes the reintegration of leasing
expenses less depreciation and other financial expenses booked in
relation to IFRS16
Net Profit Recurring excluding IFRS16:
H1 2020
FY 2020
H1 2021
(A) Net Profit as Published
1,124.6
2,528.0
1,293.1
(B) Exceptional and significant
transactions after-tax with no impact on OIR
(34.7)
94.0
0.0
(A) - (B) = Net Profit
recurring
1,159.3
2,434.0
1,293.1
(C) IFRS16 Impact(1)
(6.8)
(13.2)
(6.0)
(A) - (B) - (C) = Net Profit recurring
excluding IFRS16
1,166.1
2,447.2
1,299.1
(1) The IFRS16 impact includes the reintegration of leasing
expenses less depreciation and other financial expenses booked in
relation to IFRS16
EFFICIENCIES
Efficiencies represent a sustainable cost reduction resulting
from an action plan on a specific project. Efficiencies are
identified and managed on a per project basis. Each project is
followed by a team composed in alignment with the nature of the
project (purchasing, operations, human resources...).
RETURN ON CAPITAL EMPLOYED - ROCE
Return on capital employed after tax is calculated based on the
Group’s consolidated financial statements, by applying the
following ratio for the period in question.
For the numerator: net profit excluding IFRS16 - net finance
costs after taxes for the period in question.
For the denominator: the average of (total shareholders' equity
excluding IFRS16 + net debt) at the end of the past three
half-years.
H1 2020
FY 2020
H1 2021
ROCE Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(b)-(a)+(c)
Net Profit Excluding IFRS16
1,131.4
2,541.2
1,299.1
2,708.9
Net Finance costs
(170.5)
(352.8)
(140.7)
(323.0)
Effective Tax Rate (1)
25.2%
26.5%
24.5%
Net Finance costs after tax
(127.5)
(259.3)
(106.2)
(238.0)
Net Profit - Net financial costs after
tax
1,258.9
2,800.5
1,405.3
2,946.9
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
18,777.5
19,032.2
19,607.6
19,139.1
Net Debt
13,175.7
10,609.3
12,013.2
11,932.7
Average of (total equity + net
debt)
31,953.2
29,641.5
31,620.8
31,071.8
ROCE
9.5%
(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 excluding IFR16 for the
numerator.
H1 2020
FY 2020
H1 2021
Recurring ROCE
Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(b)-(a)+(c)
Net Profit Recurring Excluding
IFRS16
1,166.1
2,447.2
1,299.1
2,580.2
Net Finance costs
(170.5)
(352.8)
(140.7)
(323.0)
Effective Tax Rate(1)
25.2%
26.5%
24.5%
Net Finance costs after tax
(127.5)
(259.3)
(106.2)
(238.0)
Neutralizing Airgas "senior
notes" from Net Finance Costs after tax(2)
(30.3)
Net Finance costs after tax
excluding Airgas senior notes(2)
(127.5)
(229.0)
(106.2)
(207.7)
Recurring Net Profit Excluding
IFRS16
- Net financial costs after tax
excluding Airgas senior notes(2)
1,293.6
2,676.2
1,405.3
2,787.9
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
18,777.5
19,032.2
19,607.6
19,139.1
Net Debt
13,175.7
10,609.3
12,013.2
11,932.7
Average of (total equity + net
debt)
31,953.2
29,641.5
31,620.8
31,071.8
Recurring ROCE
9.0%
(1) excluding non-recurring tax impact
(2) The impact of the reimbursement of Airgas senior notes is
removed from Net Finance costs after tax as it is already excluded
in the calculation of Net Profit Recurring in numerator
Calculation of performance indicators (Quarter)
Q2 2021
Q2 2021/2020 Published
Growth
Currency impact
Natural gas impact
Electricity impact
Significant scope
impact
Q2 2021/2020 Comparable
Growth
Revenue
Group
5,512
+12.4%
(226)
171
68
(129)
+15.2%
Impacts in %
-4.6%
+3.5%
+1.3%
-3.0%
Gas & Services
5,247
+10.9%
(220)
171
68
(129)
+13.7%
Impacts in %
-4.7%
+3.6%
+1.5%
-3.2%
2nd quarter 2021 revenue
BY GEOGRAPHY
Revenue
(in millions of euros)
Q2 2020
Q2 2021
Published change
Comparable change
Americas
1,853
2,056
+10.9%
+17.4%
Europe
1,649
1,860
+12.8%
+10.6%
Asia-Pacific
1,097
1,176
+7.1%
+10.8%
Middle East & Africa
130
155
+19.9%
+20.4%
Gas & Services Revenue
4,729
5,247
+10.9%
+13.7%
Engineering & Construction
52
93
+79.5%
+83.6%
Global Markets & Technologies
122
172
+41.7%
+44.4%
GROUP REVENUE
4,903
5,512
+12.4%
+15.2%
BY WORLD BUSINESS LINE
Revenue
(in millions of euros)
Q2 2020
Q2 2021
Published change
Comparable change
Large industries
1,136
1,471
+29.5%
+12.3%
Industrial Merchant
2,107
2,342
+11.1%
+17.9%
Healthcare
977
921
-5.7%
+8.7%
Electronics
509
513
+0.8%
+7.7%
GAS & SERVICES REVENUE
4,729
5,247
+10.9%
+13.7%
Geographic and segment information
H1 2020
H1 2021
(in millions of euros and %)
Revenue
Operating income
recurring
OIR margin
Revenue
Operating income
recurring
OIR margin
Americas
3,975
744
18.7%
4,059
802
19.7%
Europe
3,440
680
19.8%
3,657
692
18.9%
Asia-Pacific
2,236
484
21.7%
2,326
513
22.1%
Middle East and Africa
269
39
14.3%
308
60
19.3%
Gas & Services
9,920
1,947
19.6%
10,350
2,066
20.0%
Engineering and Construction
104
(21)
-20.5%
169
8
4.5%
Global Markets & Technologies
249
24
9.8%
327
40
12.2%
Reconciliation
-
(137)
-
-
(166)
-
TOTAL GROUP
10,273
1,813
17.6%
10,846
1,948
18.0%
Consolidated income statement
(in millions of euros)
1st half 2020
1st half 2021
Revenue
10,272.8
10,845.7
Other income
53.3
70.0
Purchases
(3,631.3)
(4,078.6)
Personnel expenses
(2,183.1)
(2,129.2)
Other expenses
(1,614.3)
(1,711.3)
Operating income recurring before
depreciation and amortization
2,897.4
2,996.6
Depreciation and amortization expenses
(1,084.3)
(1,048.9)
Operating income recurring
1,813.1
1,947.7
Other non-recurring operating income
9.3
12.7
Other non-recurring operating expenses
(101.5)
(52.9)
Operating income
1,720.9
1,907.5
Net finance costs
(170.5)
(140.7)
Other financial income
9.6
4.1
Other financial expenses
(55.1)
(50.9)
Income taxes
(380.8)
(425.3)
Share of profit of associates
0.5
(1.6)
PROFIT FOR THE PERIOD
1,124.6
1,293.1
- Minority interests
46.2
53.8
- Net profit (Group share)
1,078.4
1,239.3
Basic earnings per share (in
euros)
2.29
2.63
Consolidated balance sheet
ASSETS (in millions of euros)
December 31, 2020
June 30, 2021
Goodwill
13,087.4
13,435.4
Other intangible assets
1,397.8
1,413.9
Property, plant and equipment
20,002.9
21,360.0
Non-current assets
34,488.1
36,209.3
Non-current financial assets
602.5
621.3
Investments in associates
160.9
157.3
Deferred tax assets
268.4
274.4
Fair value of non-current derivatives
(assets)
90.9
52.2
Other non-current assets
1,122.7
1,105.2
TOTAL NON-CURRENT ASSETS
35,610.8
37,314.5
Inventories and work-in-progress
1,405.9
1,481.6
Trade receivables
2,205.8
2,500.4
Other current assets
737.7
797.2
Current tax assets
90.4
96.9
Fair value of current derivatives
(assets)
44.1
38.4
Cash and cash equivalents
1,791.4
1,387.3
TOTAL CURRENT ASSETS
6,275.3
6,301.8
ASSETS HELD FOR SALE
91.0
82.7
TOTAL ASSETS
41,977.1
43,699.0
EQUITY AND LIABILITIES (in millions of
euros)
December 31, 2020
June 30, 2021
Share capital
2,605.1
2,606.5
Additional paid-in capital
2,608.1
2,624.8
Retained earnings
11,033.8
12,783.1
Treasury shares
(139.8)
(179.9)
Net profit (Group share)
2,435.1
1,239.3
Shareholders' equity
18,542.3
19,073.8
Minority interests
462.3
500.2
TOTAL EQUITY
19,004.6
19,574.0
Provisions, pensions and other employee
benefits
2,418.3
2,324.2
Deferred tax liabilities
1,871.5
1,936.3
Non-current borrowings
10,220.2
10,068.9
Non-current lease liabilities
969.4
993.8
Other non-current liabilities
206.5
247.0
Fair value of non-current derivatives
(liabilities)
11.5
19.2
TOTAL NON-CURRENT LIABILITIES
15,697.4
15,589.4
Provisions, pensions and other employee
benefits
316.1
304.0
Trade payables
2,437.9
2,608.4
Other current liabilities
1,809.2
1,770.6
Current tax payables
215.2
223.7
Current borrowings
2,180.5
3,331.6
Current lease liabilities
218.2
219.7
Fair value of current derivatives
(liabilities)
59.0
42.1
TOTAL CURRENT LIABILITIES
7,236.1
8,500.1
LIABILITIES HELD FOR SALE
39.0
35.5
TOTAL EQUITY AND LIABILITIES
41,977.1
43,699.0
Consolidated cash flow statement
(in millions of euros)
1st half 2020
1st half 2021
Operating activities
Net profit (Group share)
1,078.4
1,239.3
Minority interests
46.2
53.8
Adjustments:
• Depreciation and amortization
1,084.3
1,048.9
• Changes in deferred taxes
1.8
(14.6)
• Changes in provisions
(12.9)
(30.5)
• Share of profit of associates
(0.4)
1.6
• Profit/loss on disposal of assets
(7.2)
22.1
• Net finance costs
119.7
101.3
• Other non cash items
60.8
61.5
Cash flow from operating activities
before changes in net working capital
2,370.7
2,483.4
Changes in working capital
(157.0)
(266.8)
Other cash items
(60.9)
(26.2)
Net cash flows from operating
activities
2,152.8
2,190.4
Investing activities
Purchase of property, plant and equipment
and intangible assets
(1,319.9)
(1,439.0)
Acquisition of consolidated companies and
financial assets
(63.9)
(569.2)
Proceeds from sale of property, plant and
equipment and intangible assets (a)
68.7
44.6
Proceeds from the sale of subsidiaries,
net of net debt sold and from the sale of financial assets (a)
13.8
84.2
Dividends received from equity
affiliates
2.0
3.3
Net cash flows used in investing
activities
(1,299.3)
(1,876.1)
Financing activities
Dividends paid
• L'Air Liquide S.A.
(1,306.7)
(1,332.7)
• Minority interests
(42.8)
(33.4)
Proceeds from issues of share capital
26.7
22.6
Purchase of treasury shares
(50.4)
(40.2)
Net financial interests paid
(166.9)
(146.8)
Increase (decrease) in borrowings
1,319.6
874.9
Lease liabilities repayments
(121.4)
(118.4)
Net interests paid on lease
liabilities
(20.3)
(16.5)
Transactions with minority
shareholders
(9.7)
(36.8)
Net cash flows from (used in) financing
activities
(371.9)
(827.3)
Effect of exchange rate changes and change
in scope of consolidation
11.7
60.7
Net increase (decrease) in net cash and
cash equivalents
493.3
(452.3)
NET CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE PERIOD
896.5
1,718.6
NET CASH AND CASH EQUIVALENTS AT THE
END OF THE PERIOD
1,389.8
1,266.3
- Since December 31, 2020, proceeds from the sale of subsidiaries
are reported in the line “Proceeds from the sale of subsidiaries,
net of net debt sold and from the sale of financial assets” whereas
they used to be included in “Proceeds from sale of property, plant
and equipment and intangible assets” on June 30, 2020. If this
presentation had been in use, these two lines would have shown 45.6
million euros and 36.9 million euros respectively.
The analysis of net cash and cash equivalents at the end of
the period is as follows:
(in millions of euros)
June 30, 2020
December 31, 2020
June 30, 2021
Cash and cash equivalents
1,474.2
1,791.4
1,387.3
Bank overdrafts (included in current
borrowings)
(84.4)
(72.8)
(121.0)
NET CASH AND CASH EQUIVALENTS
1,389.8
1,718.6
1,266.3
Net debt calculation
(in millions of euros)
June 30, 2020
December 31, 2020
June 30, 2021
Non-current borrowings
(12,487.9)
(10,220.2)
(10,068.9)
Current borrowings
(2,162.0)
(2,180.5)
(3,331.6)
TOTAL GROSS DEBT
(14,649.9)
(12,400.7)
(13,400.5)
Cash and cash equivalents
1,474.2
1,791.4
1,387.3
TOTAL NET DEBT AT THE END OF THE
PERIOD
(13,175.7)
(10,609.3)
(12,013.2)
Statement of changes in net debt
(in millions of euros)
1st half 2020
FY 2020
1st half 2021
Net debt at the beginning of the
period
(12,373.3)
(12,373.3)
(10,609.3)
Net cash flows from operating
activities
2,152.8
5,205.7
2,190.4
Net cash flows used in investing
activities
(1,299.3)
(1,954.6)
(1,876.1)
Net cash flows used in financing
activities excluding changes in borrowings
(1,524.6)
(1,690.5)
(1,555.4)
Total net cash flows
(671.1)
1,560.6
(1,241.1)
Effect of exchange rate changes, opening
net debt of newly acquired companies and others
(14.5)
443.1
(64.8)
Adjustment of net finance costs
(116.8)
(239.7)
(98.0)
Change in net debt
(802.4)
1,764.0
(1,403.9)
NET DEBT AT THE END OF THE
PERIOD
(13,175.7)
(10,609.3)
(12,013.2)
The slideshow that accompanies this release
is available as of 9:45 am (Paris time) at www.airliquide.com.
Throughout the year, follow Air Liquide on Twitter:
@AirLiquideGroup.
UPCOMING EVENTS
2021 3rd Quarter Revenue: October 22, 2021
A world leader in gases, technologies and services for Industry
and Health, Air Liquide is present in 78 countries with
approximately 64,500 employees and serves more than 3.8 million
customers and patients. Oxygen, nitrogen and hydrogen are essential
small molecules for life, matter and energy. They embody Air
Liquide’s scientific territory and have been at the core of the
company’s activities since its creation in 1902.
Air Liquide’s ambition is to be a leader in its industry,
deliver long term performance and contribute to sustainability -
with a strong commitment to climate change and energy transition at
the heart of its strategy. The company’s customer-centric
transformation strategy aims at profitable, regular and responsible
growth over the long term. It relies on operational excellence,
selective investments, open innovation and a network organization
implemented by the Group worldwide. Through the commitment and
inventiveness of its people, Air Liquide leverages energy and
environment transition, changes in healthcare and digitization, and
delivers greater value to all its stakeholders.
Air Liquide’s revenue amounted to more than 20 billion euros in
2020. Air Liquide is listed on the Euronext Paris stock exchange
(compartment A) and belongs to the CAC 40, EURO STOXX 50 and
FTSE4Good indexes.
1 See definition in the Appendix.
2 See definition and reconciliation in the Appendix
3 See definition and reconciliation in the Appendix
4 See definition in the Appendix.
5 See definition and reconciliation in the appendix
6 Including transactions with minority shareholders.
7 See definition and reconciliation in the Appendix
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005929/en/
Investor Relations IRTeam@airliquide.com
Media Relations media@airliquide.com
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