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Regulatory News:
Air Liquide (Paris:AI):
Key Figures (in millions of euros)
H1 2023
2023/2022 as
published
2023/2022
comparable(a)
Group Revenue
13,980
-1.6%
+4.9%
of which Gas & Services
13,405
-1.4%
+5.3%
Operating Income Recurring (OIR)
2,481
+8.5%
+13.0%
Group OIR Margin
17.7%
+160 bps
Variation excluding energy impact(b)
+80 bps
Gas & Services OIR Margin
19.3%
+160 bps
Variation excluding energy impact(b)
+70 bps
Net Profit (Group Share)
1,722
+31.9%
Net Profit Recurring (Group Share)(c)
1,627
+4.9%
Variation Net Profit Recurring (Group Share) excluding currency impact(b)
+11.3%
Earnings per Share (in euros)
3.30
+32.0%
Cash flow from operating activities before changes in working capital
3,211
+10.4%
Net Debt
€10.6 bn
Return on Capital Employed after tax - ROCE
10.0%
+100 bps
Recurring ROCE(d)
10.2%
+50 bps
(a) Change excluding the currency, energy (natural gas and electricity) and significant scope impacts, see reconciliation in appendix.
(b) See reconciliation in appendix.
(c) Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.
(d) Based on the recurring net profit, see reconciliation in appendix.
Commenting on the results in the first half of 2023, François Jackow, Chief Executive Officer of the Air Liquide Group, stated:
“In a complex and changing macroeconomic and geopolitical environment, Air Liquide delivered, in the first half of the year, a very solid performance characterized by sales growth on a comparable basis and a new increase in its operating margin excluding the energy impact. This performance highlights the resilience and quality of our business model and is in line with the trajectory of our ADVANCE strategic plan.
Revenue reached 13.98 billion euros, an increase of +4.9% on a comparable basis in the first semester. On an as published basis, the year-over-year comparison was -1.6%, due to the drop in energy prices - whose variations are passed on to Large Industries customers - as well as negative currency impacts. 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.
In line with its ADVANCE strategic plan, Air Liquide continued the steady improvement of its operational performance. The Group generated significant efficiencies of 206 million euros, up +24% despite an inflationary context unfavorable to savings on purchases, and continued the dynamic management of its business portfolio. Its ability to create value allowed it to adjust its prices in Industrial Merchant while preserving sales volumes. As a result, the operating margin increased further, by +80 basis points excluding the energy impact.
Net profit (Group share) amounted to 1.72 billion euros, up +32% as published. Recurring net profit(1) increased by +11.3% excluding currency impacts. Cash flow(2) grew by +13% excluding currency impacts. The balance sheet is strong with a net debt to equity ratio of 39.2%(3). Recurring ROCE (4), which amounted to 10.2% at end-June, remains above 10%, in line with ADVANCE’s objectives.
In terms of outlook, the Group's investment momentum remained strong, reflecting our commitment to climate and paving the way for future growth. The project backlog, at 3.5 billion euros, remained high. Investment decisions reached 1.8 billion euros this semester. With more than 40% of projects linked to the energy transition, 12-month investment opportunities are numerous and total 3.4 billion euros.
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(5).”
(1) Net profit recurring excluding exceptional and significant transactions that have no impact on the operating income recurring.
(2) Cash Flow from operations before changes in working capital
(3) Adjusted for dividend seasonality.
(4) Recurring ROCE based on Recurring Net Profit.
(5) Operating margin excluding energy passthrough impact. Net profit recurring excluding exceptional and significant transactions that have no impact on the operating income recurring.
Highlights
Group revenue totaled 13,980 million euros in the 1st half of 2023, up +4.9% on a comparable basis. Group revenue as published in the 1st half-year was down -1.6%, impacted by unfavorable energy (-4.7%) and currency (-2.1%) impacts, with the significant scope impact being slightly positive at +0.3%.
Gas & Services revenue amounted to 13,405 million euros during the 1st half, a comparable increase of +5.3%. Published sales in the 1st half of 2023 were down slightly by -1.4%, impacted by negative energy and currency impacts of -4.9% and -2.1% respectively, the significant scope impact being limited (+0.3%).
Industrial Merchant revenue continued to grow strongly (+12.1%), driven by a high price effect of +10.7% and growing volumes. Large Industries revenue, down -3.6% in a context of weak demand, saw a significant improvement compared to a 2nd half of 2022 which was heavily impacted by the sharp increase in energy prices, in Europe in particular. Electronics sales were up +6.3% in the half-year: following double-digit growth in the 1st quarter, revenue growth was more moderate in the 2nd quarter due to a very high basis of comparison in 2022 and lower demand from memory manufacturers. Lastly, the strong growth in sales in Healthcare (+8.2%) was supported by the increase in the prices of medical gases in an inflationary context and the dynamism of Home Healthcare.
Consolidated revenue from Engineering & Construction totaled 180 million euros in the 1st half of 2023, down -17.3% compared to the high sales to third-party customers in the 1st half of 2022. Consolidated revenue does not reflect the volume of activity carried out with internal projects in Large Industries or Electronics. Order intake amounted to 530 million euros, a slight increase compared to the 1st half of 2022.
Sales in the Global Markets & Technologies business increased by +3.9% on a comparable basis and amounted to 395 million euros in the 1st half-year. Organic growth reached +17%, excluding several divestitures. Order intake for Group projects and third-party customers reached 496 million euros.
The Group's operating income recurring (OIR) reached 2,481 million euros in the 1st half of 2023. It was up by +8.5% and +13.0% on a comparable basis, which is significantly higher than the comparable growth in sales of +4.9%.
The operating margin (OIR to revenue) stood at 17.7%, a strong improvement of +80 basis points excluding the energy impact.
Efficiencies(1) contributed to this improvement in margin. They amounted to 206 million euros, up sharply by +23.6% compared to the 1st half of 2022 and in line with the annual target of more than 400 million euros.
Net profit (Group share) amounted to 1,722 million euros in the 1st half of 2023, with an increase as published of +31.9% and +39.5% excluding the currency impact. Excluding the proceeds from the sale of the stake in Hydrogenics, the impairment of an intangible asset and of assets held for sale, net profit recurring (Group share)(2) amounted to 1,627 million euros. This was up by +4.9% and +11.3% excluding currency, compared to net profit recurring (Group share) in the 1st half of 2022, a significant increase over comparable sales growth of +4.9%. Net earnings per share rose by +32.0% compared with the 1st half of 2022, in line with the increase in net profit (Group share). These stood at 3.30 euros per share compared with 2.50 euros per share in the 1st half of 2022.
Cash flows from operating activities before changes in working capital amounted to 3,211 million euros during the 1st half of 2023, representing a sharp increase of +10.4% and +13.2% excluding the currency impact.
Net debt at June 30, 2023 reached 10,550 million euros, a sharp decrease compared with 12,010 million euros at June 30, 2022 and an increase of 289 million euros compared with December 31, 2022, following the payment of more than 1.6 billion euros in dividends in May.
The return on capital employed after tax (ROCE) was 10.0% for the 1st half of 2023. At 10.2%, recurring ROCE(3) remained above the target of 10.0% in the Advance strategic plan, and was up sharply by +50 basis points compared to the 1st half of 2022.
In order to accelerate the decarbonization of its production units, Air Liquide announced in the 1st half of 2023 the signing of long-term renewable energy supply contracts (PPAs) for more than 1,000 GWh per year. This will equate to a reduction of its annual CO2 emissions by approximately -970,000 tonnes.
In the 1st half of 2023, industrial and financial investment decisions amounted to 1,798 million euros. They were stable compared to the very high level of the 1st half of 2022.
At 3.5 billion euros, the investment backlog remained at a very high level for three quarters and posted a strong increase compared to the 3.0 billion euros in the 1st half of 2022.
The additional contribution to sales of unit start-ups and ramp-ups totaled 139 million euros over the 1st half of 2023. Over full-year 2023, it is expected to be at the low end of the range of 300 to 330 million euros previously communicated.
At 3.4 billion euros, the 12-month portfolio of investment opportunities remained very high at the end of June 2023. This reflects the dynamism of project developments, particularly in the energy transition, representing more than 40% of the portfolio, as well as in the Electronics business.
The Air Liquide Board of Directors met on July 26, 2023. During this meeting, the Board reviewed the consolidated financial statements ending June 30, 2023. Limited review procedures were completed with respect to the consolidated interim financial statements, and an unqualified review report is in the process of being issued by the statutory auditors.
Table of Contents of the activity report
H1 2023 PERFORMANCE
7
Key Figures
7
Income Statement
8
Change in Net debt
18
Extra-financial performance
19
INVESTMENT CYCLE
20
RISKS FACTORS
21
OUTLOOK
21
APPENDICES
22
Performance indicators
22
Calculation of performance indicators (Semester)
24
Calculation of performance indicators (Quarter)
27
2nd quarter 2023 revenue
27
Geographic and segment information
28
Consolidated income statement
28
Consolidated balance sheet
29
Consolidated cash flow statement
30
Sales, operating income recurring and investments key figures synthesis
32
H1 2023 PERFORMANCE
Unless otherwise stated, all variations in revenue outlined below are on a comparable basis, excluding currency, energy (natural gas and electricity) and significant scope impacts.
Key Figures
(in millions of euros)
H1 2022
H1 2023
2023/2022
published
change
2023/2022
comparable
change(a)
Total Revenue
14,207
13,980
-1.6%
+4.9%
Of which Gas & Services
13,600
13,405
-1.4%
+5.3%
Operating Income Recurring (OIR)
2,286
2,481
+8.5%
+13.0%
Group OIR Margin
16.1%
17.7%
+160 bps
Variation excluding energy impact(b)
+80 bps
Other Non-Recurring Operating Income and Expenses
(270)
33
Net Profit (Group Share)
1,305
1,722
+31.9%
Net Profit Recurring (Group share)(c)
1,551
1,627
+4.9%
Variation Net Profit Recurring (Group Share) excluding currency impact(b)
+11.3%
Net earnings per share (in euros)
2.50
3.30
+32.0%
Cash flow from operating activities before changes in working capital
2,907
3,211
+10.4%
Net Capital Expenditure(d)
1,547
1,466
Net Debt
€12.0 bn
€10.6 bn
Net Debt to Equity ratio(e)
46.0%
39.2%
Return on Capital Employed after tax - ROCE
9.0%
10.0%
+100 bps
Recurring ROCE(f)
9.7%
10.2%
+50 bps
(a) Change excluding the currency, energy (natural gas and electricity) and significant scope impacts, see reconciliation in appendix.
(b) See reconciliation in appendix.
(c) Excluding exceptional and significant transactions that have no impact on the operating income recurring, see reconciliation in appendix.
(d) Including transactions with minority shareholders.
(e) Adjusted to spread the dividend payment in 1st half out over the full year.
(f) Based on the recurring net profit, see reconciliation in appendix.
Income Statement
REVENUE
Revenue
(in millions of euros)
H1 2022
H1 2023
2023/2022
published
change
2023/2022
comparable
change
Gas & Services
13,600
13,405
-1.4%
+5.3%
Engineering & Construction
221
180
-18.4%
-17.3%
Global Markets & Technologies
386
395
+2.5%
+3.9%
TOTAL REVENUE
14,207
13,980
-1.6%
+4.9%
Revenue by quarter
(in millions of euros)
Q1 2023
Q2 2023
Gas & Services
6,893
6,512
Engineering & Construction
87
93
Global Markets & Technologies
194
201
TOTAL REVENUE
7,174
6,806
2023/2022 Group published change
+4.2%
-7.0%
2023/2022 Group comparable change
+6.2%
+3.8%
2023/2022 Gas & Services comparable change
+6.7%
+4.1%
Group
Group revenue totaled 13,980 million euros in the 1st half of 2023, up +4.9% on a comparable basis. Sales were up +3.8% during the 2nd quarter of 2023 compared with the 2nd quarter of 2022.
Global Markets & Technologies sales were up +3.9% and showed organic growth of +17%, excluding the impact of divestitures. Consolidated revenue from Engineering & Construction was down -17.3% compared to high sales to third-party customers in the 1st half of 2022.
Group revenue as published in the 1st half-year was down -1.6%, impacted by unfavorable energy (-4.7%) and currency (-2.1%) impacts, with the significant scope impact being slightly positive at +0.3%.
Gas & Services
Gas & Services revenue amounted to 13,405 million euros during the 1st half, a comparable increase of +5.3%.
Industrial Merchant revenue continued to grow strongly (+12.1%), driven by a high price effect of +10.7% and growing volumes. Large Industries revenue, down -3.6% in a context of weak demand, saw a significant improvement compared to a 2nd half of 2022 which was heavily impacted by the sharp increase in energy prices, in Europe in particular. Electronics sales were up +6.3% in the half-year: following double-digit growth in the 1st quarter, revenue growth was more moderate in the 2nd quarter due to a very high basis of comparison in 2022 and lower demand from memory manufacturers. Lastly, the strong growth in sales in Healthcare (+8.2%) was supported by the increase in the prices of medical gases in an inflationary context and the dynamism of Home Healthcare.
Published sales in the 1st half of 2023 were down slightly by -1.4%, impacted by negative energy and currency impacts of -4.9% and -2.1% respectively, the significant scope impact being limited (+0.3%).
Revenue by geography and business line
(in millions of euros)
H1 2022
H1 2023
2023/2022
published
change
2023/2022
comparable
change
Americas
5,017
5,159
+2.8%
+6.7%
Europe
5,424
4,975
-8.3%
+4.8%
Asia-Pacific
2,746
2,763
+0.6%
+3.8%
Middle East & Africa
413
508
+23.0%
+5.8%
GAS & SERVICES REVENUE
13,600
13,405
-1.4%
+5.3%
Large Industries
4,940
4,060
-17.8%
-3.6%
Industrial Merchant
5,510
6,050
+9.8%
+12.1%
Healthcare
1,925
2,034
+5.6%
+8.2%
Electronics
1,225
1,261
+3.0%
+6.3%
Americas
Gas & Services revenue in the Americas reached 5,159 million euros in the 1st half of 2023, representing an increase of +6.7%. Sales in the Industrial Merchant business were up sharply, by +10.0%, driven by a high price effect (+7.5%). Customer shutdowns penalized Large Industries sales (-3.9%) while volumes remained solid overall in the US Gulf Coast. In Healthcare, price increases in Proximity Care in the United States and the dynamism of Home Healthcare in Canada and South America were the main contributors to the very strong increase in sales (+13.5%). Lastly, after very solid growth in 2022, revenue from the Electronics business was down by -5.8% in the 1st half due to the sharp decline in sales of materials in the 2nd quarter, in a context of slowdown in demand from memory manufacturers.
Americas Gas & Services H1 2023 Revenue
Europe
Revenue in Europe was up +4.8% during the 1st half of 2023 and reached 4,975 million euros. In Industrial Merchant, the very strong increase in sales of +18.1% benefited from a price effect that remained very high at +19.0%. Healthcare sales were up +5.8%, driven notably by the strong development of diabetes treatment in Home Healthcare and higher medical gas prices in response to inflation. Large Industries revenue was down -3.6% in the 1st half-year, however this was a significant improvement compared to a 2nd half of 2022 heavily impacted by the sharp increase in energy prices.
Europe Gas & Services H1 2023 Revenue
Europe
Asia Pacific
Sales in Asia Pacific were up +3.8% in the 1st half of 2023 and amounted to 2,763 million euros. Large Industries revenue, down -5.9%, was impacted in particular 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 the 2nd quarter. In the Electronics business (+7.3%), after double-digit sales growth in the 1st quarter, revenue growth was more moderate in the 2nd quarter (+4.3%).
Asia Pacific Gas & Services H1 2023 Revenue
Asia Pacific
Middle East and Africa
Revenue in the Middle East & Africa region increased by +5.8% to 508 million euros in the 1st half of 2023. The sales growth in air gases in South Africa and Egypt explained the solid performance of Large Industries. In Industrial Merchant, a high price effect (+8.7%) 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. In the Healthcare business, the development of diabetes treatment in Saudi Arabia and the contribution of an acquisition in South Africa were the main drivers of the strong growth in Home Healthcare.
Middle East and Africa
Engineering & Construction
Consolidated revenue from Engineering & Construction totaled 180 million euros in the 1st half of 2023, down -17.3% compared to the high sales to third-party customers in the 1st half of 2022. Consolidated revenue does not reflect the volume of activity carried out with internal projects in Large Industries or Electronics.
Order intake amounted to 530 million euros, a slight increase compared to the 1st half of 2022. Orders for third-party customers represent more than half of the total and include large scale hydrogen production and liquefaction units. Group projects include Air Separation Units, a rare gas production unit and an industrial scale pilot ammonia cracking unit.
Engineering & Construction
Global Markets & Technologies
Sales in the Global Markets & Technologies business increased by +3.9% and amounted to 395 million euros in the 1st half-year. Organic growth reached +17%, excluding the divestiture of the biogas distribution for mobility and the manufacture of small-scale cryogenic vessels businesses. Sales of technological equipment, particularly for the liquefaction of gases (in particular Turbo-Braytons), were up sharply. The ramp-up of the hydrogen liquefier in the United States contributed to the very strong growth of hydrogen mobility.
Order intake for Group projects and third-party customers reached 496 million euros. This notably included Turbo-Brayton LNG reliquefaction units, biogas processing equipment in the United States, hydrogen refueling stations, and equipment for the electronics industry.
Global Markets & Technologies
OPERATING INCOME RECURRING
Operating income recurring before depreciation and amortization totaled 3,710 million euros, an increase of +6.8% and +9.3% excluding the currency impact compared with the 1st half of 2022.
Purchases were down significantly by -10.3% excluding currency impacts, due to the decrease in energy costs. Other purchasing items were up slightly in an inflationary environment. Personnel costs increased by +8.3% excluding currency impacts in a context of sustained inflation. Other operating income and expenses increased by +12.2% excluding currency impacts and notably included an increase in maintenance costs and to a lesser extent travel costs, the level of which nevertheless remained lower than in 2019.
Depreciation and amortization amounted to 1,229 million euros, an increase of +4.5% excluding the currency impact, reflecting the impact of the start-up of new units.
The Group's operating income recurring (OIR) reached 2,481 million euros in the 1st half of 2023. It was up by +8.5% and +13.0% on a comparable basis, which is significantly higher than the comparable growth in sales of +4.9%. The operating margin (OIR to revenue) stood at 17.7%, a strong improvement of +80 basis points excluding the energy impact. The increase was +160 basis points as published thanks to the accretive effect linked to the decrease in energy costs contractually passed through to Large Industries customers.
Efficiencies(4) contributed to this improvement in margin. They amounted to 206 million euros, up sharply by +23.6% compared to the 1st half of 2022 and in line with the annual target of more than 400 million euros. These efficiencies represent a saving of 1.9% of the cost base. Industrial efficiencies increased and accounted for more than 50% of the total. 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 connection of new units to remote operation centers (Smart Innovative Operations, SIO), in Industrial Merchant with the implementation of tools to optimize delivery routes for bulk and, increasingly, cylinders, and in Healthcare with the deployment of remote patient support platforms. The continued implementation of shared service centers also contributes to efficiencies as well as the global continuous improvement program which is supported by a digital platform facilitating the replication of best initiatives.
Pricing and portfolio management also supported margin improvement.
Gas & Services
H1 2023 Gas & Services Operating Income Recurring
Gas & Services operating income recurring totaled 2,587 million euros, up +7.6% as published compared with the 1st half of 2022, and up +11.8% on a comparable basis. The operating margin as published stood at 18.4%, a significant improvement of +70 basis points excluding the energy impact compared with the 1st half of 2022.
Industrial Merchant prices were up +10.7% in the 1st half, demonstrating the Group’s ability to pass through cost increases. Prices were also up in Large Industries, Electronics and Healthcare, in all regions.
Gas & Services Operating margin(a)
H1 2022
H1 2023
2023/2022 excluding
energy impact
Americas
19.3%
19.9%
+10 bps
Europe
14.2%
17.0%
+100 bps
Asia-Pacific
20.7%
22.1%
+170 bps
Middle East & Africa
23.3%
20.0%
-320 bps
TOTAL
17.7%
19.3%
+70 bps
(a) Operating income recurring / revenue as published
Operating income recurring in the Americas reached 1,029 million euros over the 1st half of 2023, an increase of +6.2% as published. Excluding the energy impact, the operating margin increased by +10 basis points compared with the 1st half of 2022. This improvement was supported by the increase in the Industrial Merchant business margin, which benefited from higher prices and volumes and the high level of efficiencies. In the Electronics business, the significant decline in sales of advanced materials with high added value, and in Large Industries, the costs resulting from customer shutdowns, had an unfavorable impact on the margin, which partially offset the positive contribution of Industrial Merchant.
Operating income recurring in Europe amounted to 846 million euros, an increase as published of +9.7% compared with the 1st half of 2022. Excluding the energy impact, the operating margin improved very significantly by +100 basis points compared with the 1st half of 2022. The contribution of the Industrial Merchant business was significant, with higher prices and efficiencies supporting the increase in the operating margin. The efficiencies generated in the Healthcare activity also contributed to the improvement in the margin.
In Asia Pacific, operating income recurring stood at 611 million euros, an increase as published of +7.7%. Excluding the energy impact, the operating margin improved by +170 basis points compared with the 1st half of 2022. This improvement was supported by the increase in the Industrial Merchant business margin, which benefited from higher prices and the high level of efficiencies, and by an increase in prices in Electronics, particularly helium and rare gases. The payment of an indemnity by a Large Industries customer also contributed to this improvement.
Operating income recurring for the Middle East and Africa region amounted to 101 million euros, representing an increase of +5.2% as published compared with the 1st half of 2022. Excluding the energy impact, the operating margin was down by -320 basis points compared with the 1st half of 2022. The introduction of re-invoicing to the customer for the costs of the energy consumed by the 17 units at the Secunda site in South Africa had a highly dilutive effect on the margin(5).
Engineering & Construction
Operating income recurring for Engineering & Construction amounted to 18 million euros in the 1st half of 2023, or 10.0% of sales, in line with medium-term business objectives.
Global Markets & Technologies
Operating income recurring for Global Markets & Technologies stood at 64 million euros, an increase of +29.3% as published compared with the 1st half of 2022. The operating margin reached 16.2%, a very sharp increase of +330 basis points compared with the 1st half of 2022. This performance was supported by high efficiencies and the accretive effect on the margin of the recent activities divestitures.
Research & Development and Corporate costs
Research & Development expenses and Corporate costs totaled 188 million euros, stable compared with the 1st half of 2022.
NET PROFIT
Other operating income and expenses showed a positive net balance of 33 million euros. Other operating expenses amounted to -172 million euros and included in particular the impairment of an intangible asset and of assets held for sale (these two items having no cash impact) and, to a lesser extent, restructuring costs. Other operating income amounted to 205 million euros and mainly included the sale of the Group’s stake in Hydrogenics.
The financial result totaled -211 million euros compared to -180 million euros in the 1st half of 2022. This includes net finance costs of -118 million euros, down -22.5% excluding currency impact due to the decrease in average outstanding debt and to the proceeds generated by the early redemption of bonds in US dollars. The average net finance cost of 3.3% was higher than in the 1st half of 2022 (3.0%). The average net finance cost does not include the exceptional income related to the early redemption of bonds denominated in US dollars. Other financial income and expenses stood at -93 million euros compared with -36 million euros in the 1st half of 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 was 539 million euros, an effective tax rate of 23.4%, lower than in the 1st half of 2022 (25.0%), mainly due to a reduced tax rate on the capital gain on the divestiture of the Group’s stake in Hydrogenics.
The share of profit of associates amounted to 2 million euros. The share of minority interests in net profit totaled 44 million euros, down -39.6%, mainly due to the impairment of an intangible asset.
Net profit (Group share) amounted to 1,722 million euros in the 1st half of 2023, with an increase as published of +31.9% and +39.5% excluding the currency impact. Excluding the proceeds from the sale of the stake in Hydrogenics, the impairment of an intangible asset and of assets held for sale, net profit recurring (Group share)(6) amounted to 1,627 million euros. This was up by +4.9% and +11.3% excluding currency impact, compared to net profit recurring (Group share) in the 1st half of 2022, a significant increase over comparable sales growth of +4.9%.
Net earnings per share rose by +32.0% compared with the 1st half of 2022, in line with the increase in net profit (Group share). These stood at 3.30 euros per share compared with 2.50 euros per share in the 1st half of 2022. The average number of outstanding shares used for the calculation of net earnings per share as of June 30, 2023 was 521,952,149.
Finance
Change in the number of shares
H1 2022
H1 2023
Average number of outstanding shares
522,144,843
521,952,149
Change in Net debt
Cash flow from operating activities before changes in working capital amounted to 3,211 million euros during the 1st half of 2023, representing a sharp increase of +10.4% and +13.2% excluding the currency impact. This amounted to a high level of 23.0% of sales.
The increase in the working capital requirement (WCR) compared to December 31, 2022 is limited to 298 million euros. Net cash flow from operating activities after changes in working capital requirement amounted to 2,960 million euros, a sharp increase of +32.1% compared with the 1st half of 2022.
Gross capital expenditure totaled 1,746 million euros. Industrial capital expenditure amounted to 1,714 million euros, an increase of +8.9% compared with the 1st half of 2022, and +12.4% excluding the currency impact, reflecting dynamic project development activity. Financial investments totaled 32 million euros compared with 54 million euros in the 1st half of 2022. Proceeds from the sale of fixed assets and businesses totaled 252 million euros, including the sale of the Group’s stake in Hydrogenics and the divestiture of the Large Industries business in Trinidad and Tobago. This reflects the Group’s active business portfolio management. Net capital expenditure(7) totaled 1,457 million euros.
Net debt at June 30, 2023 reached 10,550 million euros, a sharp decrease compared with 12,010 million euros at June 30, 2022 and an increase of 289 million euros compared with December 31, 2022, following the payment of more than 1.6 billion euros in dividends in May. The net debt-to-equity ratio, adjusted for the seasonal effect of the dividend payment, reached 39.2%.
The return on capital employed after tax (ROCE) was 10.0% for the 1st half of 2023. At 10.2%, recurring ROCE(8) remained above the target of 10.0% in the Advance strategic plan, and was up sharply by +50 basis points compared to the 1st half of 2022.
Extra-financial performance
In order to accelerate the decarbonization of its production units, Air Liquide announced in the 1st half of 2023 the signing of long-term renewable energy supply contracts (PPAs) for more than 1,000 GWh per year. This will equate to a reduction of its annual CO2 emissions by approximately -970,000 tonnes. The Group has also decided to build a pilot industrial-scale ammonia cracking unit to enrich its portfolio of low-carbon hydrogen production solutions.
The European Commission granted subsidies to 2 new carbon capture projects in Germany and Belgium. They will enable Group customers in the cement and lime sectors to reduce their emissions by 2.6 million tonnes of CO2 per year.
Air Liquide has partnered with Lotte Chemical in South Korea and TotalEnergies in Europe to create joint ventures that will invest primarily in hydrogen filling centers and refueling stations for heavy vehicles. The Group has also signed a partnership with Iveco to develop hydrogen mobility in Europe, with a first refueling station having been inaugurated in the south of France. Air Liquide is thus very actively involved in the decarbonization of mobility.
Importantly, an additional “scope 3” objective and new biodiversity commitments were also announced in the first half of 2023.
Sustainable development
INVESTMENT CYCLE
INVESTMENT DECISIONS AND INVESTMENT BACKLOG
In the 1st half of 2023, industrial and financial investment decisions amounted to 1,798 million euros. They were stable compared to the very high level of the 1st half of 2022.
Industrial investment decisions reached 1,771 million euros in the 1st half of 2023, an increase over the 1,738 million euros in investments decided in the 1st half of 2022. The Electronics business continued to grow, notably with the signature of long-term contracts for new carrier gas production units in the United States and Asia, and the investment in a new production site for advanced materials in Asia. In Industrial Merchant, 2nd quarter decisions include in particular three nitrogen generators for a customer manufacturing batteries in the United States, in addition to the five nitrogen generators decided in the 1st quarter in China. Within the Global Markets & Technologies business, the development of hydrogen mobility continues in China and Korea with investment decisions in hydrogen filling centers and their logistics chain.
Financial investment decisions totaled 27 million euros in the 1st half of 2023. They include seven acquisitions in Industrial Merchant in China, the United States, Italy and India to intensify the density of our local presence and thus profitability of the businesses. They also include the acquisition of a Home Healthcare company in Sweden and a company that designs and manufactures innovative equipment for Hydrogen mobility.
At 3.5 billion euros, the investment backlog remained at a very high level for three quarters and posted a strong increase compared to the 3.0 billion euros in the 1st half of 2022. The breakdown of the investment backlog is balanced between Large Industries and Electronics. These investments should lead to a future contribution to annual sales of approximately 1.2 billion euros per year after full ramp-up of the units.
START-UPS
In the 1st quarter, three large Air Separation Units (ASUs) for Large Industries customers started up in Europe and the United States. In the 2nd quarter, three carrier gas units also started up for Electronics customers in China and Japan, as well as a unit for the assembly of integrated circuits in secondary electronics in the Industrial Merchant business in Vietnam.
The additional contribution to sales of unit start-ups and ramp-ups totaled 139 million euros over the 1st half of 2023. Over full-year 2023, it is expected to be at the low end of the range of 300 to 330 million euros previously communicated.
INVESTMENT OPPORTUNITIES
At 3.4 billion euros, the 12-month portfolio of investment opportunities remained very high at the end of June 2023. This reflects the dynamism of project developments, particularly in the energy transition, representing more than 40% of the portfolio, as well as in the Electronics business. The distribution of opportunities is well-balanced between Americas, supported by the Inflation Reduction Act and the Chips Act, Europe, where large electrolyzer and carbon capture projects are in the advanced development phase, Asia, with projects in Large Industries and Electronics, and lastly, the Middle East. The portfolio beyond 12 months includes other significant projects related to the Inflation Reduction Act and the Chips Act in the United States and the energy transition in Europe and Canada.
RISK FACTORS
There was no change in risk factors during the first half. Risk factors are described in the 2022 Universal Registration Document on pages 76 to 94.
OUTLOOK
In a complex and changing macroeconomic and geopolitical environment, Air Liquide delivered, in the first half of the year, a very solid performance characterized by sales growth on a comparable basis and a new increase in its operating margin excluding the energy impact. This performance highlights the resilience and quality of its business model and is in line with the trajectory of the ADVANCE strategic plan.
Revenue reached 13.98 billion euros, an increase of +4.9% on a comparable basis in the 1st semester. On an as published basis, the year-over-year comparison was -1.6%, due to the drop in energy prices - whose variations are passed on to Large Industries customers - as well as negative currency impacts. 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.
In line with its ADVANCE strategic plan, Air Liquide continued the steady improvement of its operational performance. The Group generated significant efficiencies of 206 million euros, up +24% despite an inflationary context unfavorable to savings on purchases, and continued the dynamic management of its business portfolio. Its ability to create value allowed it to adjust its prices in Industrial Merchant while preserving sales volumes. As a result, the operating margin increased further, by +80 basis points excluding the energy impact.
Net profit (Group share) amounted to 1.72 billion euros, up +32% as published. Recurring net profit(9) increased by +11.3% excluding currency impact. Cash flow(10) grew by +13% excluding currency impact. The balance sheet is strong with a net debt to equity ratio of 39.2%(11). Recurring ROCE (12), which amounted to 10.2% at end-June, remains above 10%, in line with ADVANCE’s objectives.
In terms of outlook, the Group's investment momentum remained strong, reflecting its commitment to climate and paving the way for future growth. The project backlog, at 3.5 billion euros, remained high. Investment decisions reached 1.8 billion euros this semester. With more than 40% of projects linked to the energy transition, 12-month investment opportunities are numerous and total 3.4 billion euros.
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(13).
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:
Definition of Currency, energy and significant scope impacts
Since industrial and medical gases are rarely exported, the impact of currency fluctuations on activity levels and results is limited to euro translation impacts with respect to the financial statements of subsidiaries located outside the eurozone. The currency impact is calculated based on the aggregates for the period converted at the exchange rate for the previous period.
In addition, the Group passes on variations in the cost of energy (electricity and natural gas) to its customers via indexed invoicing integrated into their medium and long-term contracts. This indexing can lead to significant variations in sales (mainly in the Large Industries Business Line) from one period to another depending on fluctuations in prices on the energy market.
An energy impact is calculated based on the sales of each of the main subsidiaries in Large Industries. Their consolidation allows the determination of the energy impact for the Group as a whole. The foreign exchange rate used is the average annual exchange rate for the year N-1. Thus, at the subsidiary level, the following formula provides the energy impact, calculated for natural gas and electricity respectively:
Energy impact = Share of sales indexed to energy year (N-1) x (Average energy price in year (N) - Average energy price in year (N-1))
This indexation effect of electricity and natural gas does not impact the operating income recurring.
The significant scope impact corresponds to the impact on sales of all acquisitions or disposals of a significant size for the Group. These changes in scope of consolidation are determined:
Note: exceptionally, the acquisition of Sasol air separation units in 2021 had an impact in 2 steps on Group sales. After the acquisition of the assets in June 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 will thus be accounted for in the significant scope during 12 months from October 2022.
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
2023
H1 2023/2022
Published
Growth
Currency
impact
Natural gas
impact
Electricity
impact
Significant
scope
impact
H1 2023/2022
Comparable
Growth
Revenue
Group
13,980
-1.6%
(302)
(559)
(110)
48
+4.9%
Impacts in %
-2.1%
-4.0%
-0.7%
+0.3%
Gas & Services
13,405
-1.4%
(294)
(559)
(110)
48
+5.3%
Impacts in %
-2.1%
-4.1%
-0.8%
+0.3%
Operating Income Recurring
Group
2,481
+8.5%
(77)
-
-
(21)
+13.0%
Impacts in %
-3.4%
-
-
-1.1%
Gas & Services
2,587
+7.6%
(75)
-
-
(21)
+11.8%
Impacts in %
-3.2%
-
-
-1.0%
OPERATING MARGIN AND OPERATING MARGIN EXCLUDING ENERGY IMPACT
The operating margin is the ratio of the operating income recurring divided by revenue. The operating margin excluding energy impact corresponds to the operating income recurring (not affected in absolute value by the cost of energy contractually re-invoiced to Large Industries customers) divided by revenue excluding the energy impact to which is attached the corresponding currency impact. The ratio of operating income recurring divided by the revenue (whether restated or not from the energy impact) is calculated with rounding to one decimal place. The variation between 2 periods is calculated as the difference between these rounded ratios, which can result in positive or negative differences compared to a more precise calculation, due to rounding.
H1 2023
Natural gas
impact(a)
Electricity
impact(a)
H1 2023,
excluding energy
impact
Revenue
Group
13,980
(565)
(118)
14,663
Gas & Services
13,405
(565)
(118)
14,088
Operating Income Recurring
Group
2,481
2,481
Gas & Services
2,587
2,587
Operating Margin
Group
17.7%
16.9%
Gas & Services
19.3%
18.4%
(a) Including the currency impact attached to the considered energy impact.
RECURRING NET PROFIT GROUP SHARE AND RECURRING NET PROFIT GROUP SHARE EXCLUDING CURRENCY IMPACT
The recurring net profit Group share corresponds to the net profit Group share excluding exceptional and significant transactions that have no impact on the operating income recurring.
H1 2022
H1 2023
2023/2022
variation
(A) Net Profit (Group Share) - As Published
1,304.8
1,721.6
+31.9%
(B) Exceptional and significant transactions after-tax with no impact on OIR
- Exceptional provisions on industrial assets in Russia and other related costs
(419.0)
- Exceptional income related to joint-venture take-over in Asia-Pacific
205.5
- Provision for risks in Engineering & Construction
(32.3)
- Sale of Group stake in Hydrogenics
156.5
- Impairment of an intangible asset and of assets held for sale
(61.6)
(A) - (B) = Net Profit Recurring (Group Share)
1,550.6
1,626.7
+4.9%
(C) Currency impact
(99.5)
(A) - (B) - (C) = Net Profit Recurring (Group Share) excluding currency impact
1,726.2
+11.3%
NET PROFIT EXCLUDING IFRS16 AND NET PROFIT RECURRING EXCLUDING IFRS16
Net Profit excluding IFRS16:
H1 2022
FY 2022
H1 2023
(A) Net Profit as Published
1,377.6
2,903.9
1,765.6
(B) = IFRS16 Impact(1)
(7.2)
(15.6)
(7.1)
(A) - (B) = Net Profit excluding IFRS16
1,384.8
2,919.5
1,772.7
(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 2022
FY 2022
H1 2023
(A) Net Profit as Published
1,377.6
2,903.9
1,765.6
(B) Exceptional and significant transactions after-tax with no impact on OIR
(245.8)
(402.9)
70.2
(A) - (B) = Net Profit recurring
1,623.4
3,306.8
1,695.4
(C) IFRS16 Impact(1)
(7.2)
(15.6)
(7.1)
(A) - (B) - (C) = Net Profit recurring excluding IFRS16
1,630.6
3,322.4
1,702.5
(1) The IFRS16 impact includes the reintegration of leasing expenses less depreciation and other financial expenses booked in relation to IFRS16
Nota: the fact that the impaired intangible asset is on the balance sheet of a company with minority interests explains the difference between the amount of significant and non-recurring items after tax taken into account in the calculation of recurring net profit Group share and the amount considered in the calculation of non-recurring ROCE (based on 100% recurring net income excluding 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.
H1 2022
FY 2022
H1 2023
ROCE
Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(b)-(a)+(c)
Net Profit Excluding IFRS16
1,384.8
2,919.5
1,772.7
3,307.4
Net Finance costs
(144.7)
(288.4)
(118.4)
(262.1)
Effective Tax Rate (1)
24.2%
25.0%
23.9%
Net Finance costs after tax
(109.7)
(216.4)
(90.1)
(196.8)
Net Profit - Net financial costs after tax
1,494.5
3,135.9
1,862.8
3,504.2
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
23,942.0
24,628.5
24,110.1
24,226.9
Net Debt
12,009.9
10,261.3
10,550.4
10,940.5
Average of (total equity + net debt)
35,951.9
34,889.8
34,660.5
35,167.4
ROCE
10.0%
(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 2022
FY 2022
H1 2023
Recurring ROCE
Calculation
(in millions of euros)
(a)
(b)
(c)
Numerator
(b)-(a)+(c)
Net Profit Recurring Excluding IFRS16
1,630.6
3,322.4
1,702.5
3,394.3
Net Finance costs
(144.7)
(288.4)
(118.4)
(262.1)
Effective Tax Rate(1)
24.2%
25.0%
23.9%
Net Finance costs after tax
(109.7)
(216.4)
(90.1)
(196.8)
Recurring Net Profit Excluding IFRS16
- Net financial costs after tax
1,740.3
3,538.8
1,792.6
3,591.1
Denominator
((a)+(b)+(c))/3
Total Equity Excluding IFRS16
23,942.0
24,628.5
24,110.1
24,226.9
Net Debt
12,009.9
10,261.3
10,550.4
10,940.5
Average of (total equity + net debt)
35,951.9
34,889.8
34,660.5
35,167.4
Recurring ROCE
10.2%
(1) excluding non-recurring tax impact
Calculation of performance indicators (Quarter)
Q2 2023
Q2 2023/2022
Published
Growth
Currency
impact
Natural gas
impact
Electricity
impact
Significant
scope impact
Q2 2023/2022
Comparable
Growth
Revenue
Group
6,806
-7.0%
(291)
(436)
(96)
35
+3.8%
Impacts in %
-4.0%
-5.9%
-1.3%
+0.4%
Gas & Services
6,512
-7.1%
(284)
(436)
(96)
35
+4.1%
Impacts in %
-4.0%
-6.3%
-1.3%
+0.4%
2nd quarter 2023 revenue
BY GEOGRAPHY
Revenue
(in millions of euros)
Q2 2022
Q2 2023
Published change
Comparable change
Americas
2,686
2,530
-5.8%
+4.6%
Europe
2,706
2,336
-13.7%
+4.0%
Asia-Pacific
1,406
1,378
-2.0%
+2.8%
Middle East & Africa
212
268
+26.3%
+7.0%
Gas & Services Revenue
7,010
6,512
-7.1%
+4.1%
Engineering & Construction
113
93
-17.9%
-16.0%
Global Markets & Technologies
197
201
+2.7%
+5.1%
GROUP REVENUE
7,320
6,806
-7.0%
+3.8%
BY WORLD BUSINESS LINE
Revenue
(in millions of euros)
Q2 2022
Q2 2023
Published change
Comparable change
Large industries
2,527
1,858
-26.4%
-3.7%
Industrial Merchant
2,872
3,012
+4.8%
+9.6%
Healthcare
970
1,018
+4.8%
+8.7%
Electronics
641
624
-2.6%
+2.6%
GAS & SERVICES REVENUE
7,010
6,512
-7.1%
+4.1%
Geographic and segment information
H1 2022
H1 2023
(in millions of euros and %)
Revenue
Operating
income
recurring
OIR margin
Revenue
Operating
income
recurring
OIR margin
Americas
5,017
969
19.3%
5,159
1,029
19.9%
Europe
5,424
771
14.2%
4,975
846
17.0%
Asia-Pacific
2,746
567
20.7%
2,763
611
22.1%
Middle East and Africa
413
97
23.3%
508
101
20.0%
Gas & Services
13,600
2,404
17.7%
13,405
2,587
19.3%
Engineering and Construction
221
22
10.1%
180
18
9.9%
Global Markets & Technologies
386
50
12.9%
395
64
16.2%
Reconciliation
-
(190)
-
-
(189)
-
TOTAL GROUP
14,207
2,286
16.1%
13,980
2,481
17.7%
Consolidated income statement
(in millions of euros)
1st half 2022
1st half 2023
Revenue
14,206.6
13,980.3
Other income
103.3
115.3
Purchases
(6,515.7)
(5,736.8)
Personnel expenses
(2,380.0)
(2,545.8)
Other expenses
(1,939.6)
(2,103.1)
Operating income recurring before depreciation and amortization
3,474.6
3,709.9
Depreciation and amortization expenses
(1,188.6)
(1,229.2)
Operating income recurring
2,286.0
2,480.7
Other non-recurring operating income
205.5
205.3
Other non-recurring operating expenses
(475.3)
(172.3)
Operating income
2,016.2
2,513.7
Net finance costs
(144.7)
(118.4)
Other financial income
29.0
9.8
Other financial expenses
(64.6)
(102.8)
Income taxes
(459.3)
(538.6)
Share of profit of associates
1.0
1.9
PROFIT FOR THE PERIOD
1,377.6
1,765.6
- Minority interests
72.8
44.0
- Net profit (Group share)
1,304.8
1,721.6
Basic earnings per share (in euros)
2.50
3.30
Consolidated balance sheet
ASSETS (in millions of euros)
December 31, 2022
June 30, 2023
Goodwill
14,587.2
14,300.4
Other intangible assets
1,811.4
1,664.7
Property, plant and equipment
23,646.9
23,658.3
Non-current assets
40,045.5
39,623.4
Non-current financial assets
775.5
752.3
Investments in equity affiliates
185.7
180.8
Deferred tax assets
232.3
191.6
Fair value of non-current derivatives (assets)
40.8
25.0
Other non-current assets
1,234.3
1,149.7
TOTAL NON-CURRENT ASSETS
41,279.8
40,773.1
Inventories and work-in-progress
1,961.0
2,022.6
Trade receivables
3,034.8
2,971.9
Other current assets
985.4
844.0
Current tax assets
196.3
70.2
Fair value of current derivatives (assets)
107.6
74.8
Cash and cash equivalents
1,911.4
1,712.2
TOTAL CURRENT ASSETS
8,196.5
7,695.7
ASSETS HELD FOR SALE
41.7
87.4
TOTAL ASSETS
49,518.0
48,556.2
EQUITY AND LIABILITIES (in millions of euros)
December 31, 2022
June 30, 2023
Share capital
2,879.0
2,880.6
Additional paid-in capital
2,349.0
2,367.8
Retained earnings
15,868.0
16,471.0
Treasury shares
(118.4)
(200.7)
Net profit (Group share)
2,758.8
1,721.6
Shareholders' equity
23,736.4
23,240.3
Minority interests
835.6
806.1
TOTAL EQUITY
24,572.0
24,046.4
Provisions, pensions and other employee benefits
1,991.1
1,986.9
Deferred tax liabilities
2,465.4
2,434.3
Non-current borrowings
10,168.8
8,762.1
Non-current lease liabilities
1,052.2
1,042.6
Other non-current liabilities
317.8
399.2
Fair value of non-current derivatives (liabilities)
54.5
46.1
TOTAL NON-CURRENT LIABILITIES
16,049.8
14,671.2
Provisions, pensions and other employee benefits
282.4
308.9
Trade payables
3,782.6
3,234.0
Other current liabilities
2,215.6
2,161.2
Current tax payables
260.1
311.3
Current borrowings
2,003.9
3,500.5
Current lease liabilities
227.6
222.9
Fair value of current derivatives (liabilities)
108.6
59.2
TOTAL CURRENT LIABILITIES
8,880.8
9,798.0
LIABILITIES HELD FOR SALE
15.4
40.6
TOTAL EQUITY AND LIABILITIES
49,518.0
48,556.2
Consolidated cash flow statement
(in millions of euros)
1st half 2022
1st half 2023
Operating activities
Net profit (Group share)
1,304.8
1,721.6
Minority interests
72.8
44.0
Adjustments:
• Depreciation and amortization expense
1,188.6
1,229.2
• Changes in deferred taxes
(24.2)
66.3
• Changes in provisions
357.1
115.9
• Share of profit of equity affiliates
(1.0)
(1.9)
• Profit/loss on disposal of assets
(170.0)
(149.4)
• Net finance costs
108.5
90.7
• Other non cash items
70.7
94.4
Cash flow from operating activities before changes in working capital
2,907.3
3,210.8
Changes in working capital
(634.5)
(298.4)
Other cash items
(31.9)
47.9
Net cash flows from operating activities
2,240.9
2,960.3
Investing activities
Purchase of property, plant and equipment and intangible assets
(1,574.0)
(1,713.9)
Acquisition of consolidated companies and financial assets
(54.0)
(31.7)
Proceeds from sale of property, plant and equipment and intangible assets
45.8
34.8
Proceeds from the sale of subsidiaries, net of net debt sold and from the sale of financial assets
22.5
252.2
Dividends received from equity affiliates
12.7
1.2
Net cash flows used in investing activities
(1,547.0)
(1,457.4)
Financing activities
Dividends paid
• L'Air Liquide S.A.
(1,408.1)
(1,578.4)
• Minority interests
(20.1)
(34.0)
Proceeds from issues of share capital
16.8
20.4
Purchase of treasury shares
(192.5)
(82.6)
Net financial interests paid
(145.1)
(135.4)
Increase (decrease) in borrowings
467.0
238.7
Lease liabilities repayments
(125.3)
(116.2)
Net interests paid on lease liabilities
(14.6)
(18.3)
Transactions with minority shareholders
-
(8.4)
Net cash flows from (used in) financing activities
(1,421.9)
(1,714.2)
Effect of exchange rate changes and change in scope of consolidation
(35.2)
(39.8)
Net increase (decrease) in net cash and cash equivalents
(763.2)
(251.1)
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
1,375.7
1,509.8
The analysis of net cash and cash equivalents at the end of the period is as follows:
(in millions of euros)
June 30, 2022
December 31, 2022
June 30, 2023
Cash and cash equivalents
1,519.7
1,911.4
1,712.2
Bank overdrafts (included in current borrowings)
(144.0)
(150.5)
(202.4)
NET CASH AND CASH EQUIVALENTS
1,375.7
1,760.9
1,509.8
Net debt calculation
(in millions of euros)
June 30, 2022
December 31, 2022
June 30, 2023
Non-current borrowings
(10,690.0)
(10,168.8)
(8,762.1)
Current borrowings
(2,839.6)
(2,003.9)
(3,500.5)
TOTAL GROSS DEBT
(13,529.6)
(12,172.7)
(12,262.6)
Cash and cash equivalents
1,519.7
1,911.4
1,712.2
TOTAL NET DEBT AT THE END OF THE PERIOD
(12,009.9)
(10,261.3)
(10,550.4)
Statement of changes in net debt
(in millions of euros)
H1 2022
FY 2022
H1 2023
Net debt at the beginning of the period
(10,448.3)
(10,448.3)
(10,261.3)
Net cash flows from operating activities
2,240.9
5,810.1
2,960.3
Net cash flows used in investing activities
(1,547.0)
(3,241.9)
(1,457.4)
Net cash flows used in financing activities excluding changes in borrowings
(1,743.8)
(1,927.2)
(1,817.6)
Total net cash flows
(1,049.9)
641.0
(314.7)
Effect of exchange rate changes, opening net debt of newly acquired companies and others
(407.1)
(248.0)
171.5
Adjustment of net finance costs
(104.6)
(206.0)
(145.9)
Change in net debt
(1,561.6)
187.0
(289.1)
NET DEBT AT THE END OF THE PERIOD
(12,009.9)
(10,261.3)
(10,550.4)
Sales, Operating Income Recurring and investments key figures synthesis
The following tables gather data already available in this report. They complement the key figures indicated in the table on the first page.
Sales
H1 2023 split of revenue and comparable growth in %
Total
Large Industries
Industrial
Merchant
Electronics
Healthcare
Americas
100%
16%
69%
5%
10%
+6.7%
-3.9%
+10.0%
-5.8%
+13.5%
Europe
100%
38%
32%
2%
28%
+4.8%
-3.6%
+18.1%
N.C.
+5.8%
Asia-Pacific
100%
35%
28%
33%
4%
+3.8%
-5.9%
+12.1%
+7.3%
N.C.
Middle-East and Africa
100%
N.C.
N.C.
N.C.
N.C.
+5.8%
Gas & Services
100%
31%
45%
9%
15%
+5.3%
-3.6%
+12.1%
+6.3%
+8.2%
Engineering & Construction
-17.3%
Global Markets & Technologies
+3.9%
GROUP TOTAL
+4.9%
N.C.: Not communicated.
Operating Income Recurring
Operating margin in %(a)
Operating Income Recurring in million euros
H1 2022
H1 2023
H1 2023,
excluding energy
impact
2023/2022
excluding energy
impact
Operating
Income
Recurring H1
2023
Americas
19.3%
19.9%
19.4%
+10 bps
1,029
Europe
14.2%
17.0%
15.2%
+100 bps
846
Asia-Pacific
20.7%
22.1%
22.4%
+170 bps
611
Middle-East and Africa
23.3%
20.0%
20.1%
-320 bps
101
Gas & Services
17.7%
19.3%
18.4%
+70 bps
2,587
Engineering & Construction
10.1%
9.9%
9.9%
-20 bps
18
Global Markets & Technologies
12.9%
16.2%
16.2%
+330 bps
64
(a) Operating income recurring / revenue as published.
Investments
in billion euros
H1 2023
12-month portfolio of investment opportunities(a)
3.4
Investment decisions(b)
1.8
Investment backlog(a)
3.5
Additional contribution to revenue of unit start-ups and ramp-ups(b) (in million euros)
139
(a) At the end of the reporting period.
(b) Cumulated from the beginning of the calendar year until the end of the reporting period.
The slideshow that accompanies this release is available as of 7:20 am (Paris time) at www.airliquide.com.
Throughout the year, follow Air Liquide on Twitter: @AirLiquideGroup.
UPCOMING EVENTS
2023 3rd Quarter Revenue:
October 25, 2023
A world leader in gases, technologies and services for Industry and Health, Air Liquide is present in 73 countries with approximately 67,100 employees and serves more than 3.9 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.
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 29.9 billion euros in 2022. Air Liquide is listed on the Euronext Paris stock exchange (compartment A) and belongs to the CAC 40, CAC 40 ESG, EURO STOXX 50, FTSE4Good and DJSI Europe indexes.
1 See definition in appendix. 2 See definition and reconciliation in appendix. 3 See definition and reconciliation in appendix. 4 See definition in appendix. 5 For more information, see explanation in appendix. 6 See definition and reconciliation in appendix. 7 Including transactions with minority shareholders and dividends received from equity affiliates. 8 See definition and reconciliation in appendix. 9 Net profit recurring excluding exceptional and significant transactions that have no impact on the operating income recurring. 10 Cash Flow from operations before changes in working capital. 11 Adjusted for dividend seasonality. 12 Recurring ROCE based on Recurring Net Profit. 13 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 version on businesswire.com: https://www.businesswire.com/news/home/20230726541651/en/
Media Relations media@airliquide.com
Investor Relations IRTeam@airliquide.com
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