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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Air Liquide    AI   FR0000120073


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Air Liquide : Q3 2020 Revenue -2-

10/23/2020 | 01:36am EST

Global Markets & Technologies revenue was 143 million euros and saw a return to very dynamic growth momentum of +11.4%, as production capacity was no longer constrained by the public health crisis. Equipment sales were up markedly, in particular membrane purification systems. The biogas business remained strong, notably in Europe where biomethane sales for transport were up, and in the United States.

Efficiencies amounted to 311 million euros over the first nine months of the year, in line with the annual objective fixed at more than 400 million euros. Since the start of the performance improvement program in 2017, 1.4 billion euros of cumulated efficiencies have been generated. Moreover, exceptional cost reductions under the public health crisis response plan continued but are not, due to their nature, sustainable over the long term.

Cash flow from operating activities amounted to 3,648 million euros at the end of September 2020, which corresponds to 23.9% of sales, a marked improvement of +240 basis points compared with the 3(rd) quarter of 2019(1) . The net debt-to-equity ratio, adjusted for the seasonal effect of the dividend payment, reached 58,3% representing a significant decrease compared with December 31, 2019 (64.0%).

Industrial investment decisions reached 685 million euros during the 3(rd) quarter and close to 2 billion euros since the beginning of 2020 despite the public health crisis. Development was very active in Large Industries, notably with the signature of a takeover in Kazakhstan and a new Air Separation Unit in Poland.

The 12-month portfolio of investment opportunities continued to improve and reached 3.0 billion euros. This excludes the on-going takeover of the 16 Air Separation Units in South Africa. The change in the portfolio confirms the Group's future growth outlook.

The additional contribution to sales of unit start-ups and ramp-ups totaled 53 million euros over the 3(rd) quarter of 2020, and 133 million euros over the first nine months of the year. This should reach 180 million euros for 2020 as a whole, at the high end of the estimate range communicated previously. For 2021, the estimated additional contribution to sales is reforecast upwards in the range of 320 to 350 million euros despite the postponement of some start-ups and after taking into account the sales contribution from the 16 Air Separation Units that are currently being taken over in South Africa.


(1) Compared with restated 3(rd) quarter 2019 following changes in 2019 annual financial statements: financial costs before taxes linked to IFRS 16 are reclassified in other financial expenses whereas they were included in net finance costs on 30 september 2019. A distinction is now made between other non-cash items under which the adjustment of this cost is recognized as well as income and expenses under IAS 19 and IFRS 2 and other cash items

Analysis of 3(rd) quarter 2020 revenue

Unless otherwise stated, all variations in revenue outlined below are on a comparable basis, excluding currency, energy (natural gas and electricity) and significant scope impacts.


                                                 2020/2019      2020/2019 
Revenue                                           published      comparable 
 (in millions of euros)        Q3 2019  Q3 2020   change         change 
Gas & Services                 5,242    4,777    -8.9    %      -0.9     % 
Engineering & Construction     81       60       -26.3   %      -24.4    % 
Global Markets & Technologies  131      143      +9.6    %      +11.4    % 
TOTAL REVENUE                  5,454    4,980    -8.7    %      -0.9     % 
Revenue by Quarter 
 (in millions of euros)                      Q1 2020  Q2 2020  Q3 2020 
Gas & Services                               5,191    4,729    4,777 
Engineering & Construction                   52       52       60 
Global Markets & Technologies                127      122      143 
TOTAL REVENUE                                5,370    4,903    4,980 
2020/2019 Group published change             -1.3%    -11.0%   -8.7% 
2020/2019 Group comparable change            +0.6%    -6.9%    -0.9% 
2020/2019 Gas & Services comparable change   +1.1%    -6.5%    -0.9% 


Group revenue for the 3(rd) quarter of 2020 totaled 4,980 million euros. The business model has proven its resilience in recent months in a challenging public health context. Business has been picking up across all regions with sales down -0.9% during the 3(rd) quarter of 2020, near 2019 levels, for both the Group and Gas & Services. China saw the most dynamic level of recovery, with 3(rd) quarter 2020 sales up markedly, whereas the situation was more contrasted in the rest of the Asia Pacific region. Activity is picking up in Europe, and posted slight growth compared with 2019. Signs of a more gradual recovery can be seen in North America and business remains strong in South America, in particular for Large Industries and Healthcare. Consolidated Engineering & Construction sales (-24.4%) reflected the priority allocation of resources to internal projects. Global Markets & Technologies returned to double-digit growth, with sales up markedly by +11.4% during the 3(rd) quarter. Due to the materially negative impacts of currency (-3.7%), significant scope (-2.6%) and energy (-1.5%), Group revenue as published was down -8.7%.

Foundation In response to the Health crisis, the Air Liquide Foundation 
launched as early as March 2020 the Covid-19 Initiative. More than 2 millions 
euros have been mobilized over two years, with a double objective: to support 
scientific research projects and to reinforce the help given to associations 
working with the most vulnerable people to the Covid-19. The Foundation has 
already approved 10 scientific projects and 21 social emergency aid projects 
on all continents since March 2020. 

Gas & Services

Gas & Services revenue for the 3(rd) quarter of 2020 reached 4,777 million euros, slightly down -0.9%. Healthcare remains highly invested in the fight against Covid-19 and posted sales growth of +8.4%. Sales growth in Electronics was also very solid at +5.9% and +7.3% excluding Equipment & Installation, with a sharp increase in Advanced Materials and Carrier Gases sales. Large Industries sales were stable, +0.2% compared with 3(rd) quarter 2019, driven notably by developing economies and in particular, by the recovery in China. Industrial Merchant posted a decline of -5.8%, sustained pricing impacts of +2.6%, growth in China, the eastern part of Europe and South America were unable to offset the slowdown from the public health crisis which continues to be strongly felt, notably in the sales of hardgoods in the United States. The major negative currency (-3.8%), significant scope (-2.7%) and energy (-1.5%) impacts affected Gas & Services revenue as published, which was down -8.9%. Significant scope impact includes the disposal of schülke in Healthcare and the reduction of the Group's participation in a reseller in Japan during the 3(rd) quarter 2020, and the disposal of Fujian Shenyuan in September 2019.

Revenue by geography and                         2020/2019      2020/2019 
business line (in millions of                     published      comparable 
euros)                         Q3 2019  Q3 2020   change         change 
Americas                       2,137    1,916    -10.3   %      -3.3    % 
Europe                         1,742    1,615    -7.3    %      +0.5    % 
Asia-Pacific                   1,207    1,101    -8.7    %      +1.6    % 
Middle East & Africa           156      145      -7.2    %      +0.0    % 
GAS & SERVICES REVENUE         5,242    4,777    -8.9    %      -0.9    % 
Large Industries               1,374    1,212    -11.8   %      +0.2    % 
Industrial Merchant            2,471    2,217    -10.3   %      -5.8    % 
Healthcare                     915      866      -5.3    %      +8.4    % 
Electronics                    482      482      -0.1    %      +5.9    % 


Gas & Services revenue in the Americas totaled 1,916 million euros in the 3(rd) quarter, marking a decline of -3.3%. North America saw a marked improvement in sales compared with the 2(nd) quarter, but these remained down compared with 2019. Latin America posted sales growth. Large Industries revenue was up over the quarter (+2.1%). Industrial Merchant saw a strong sequential rebound, but remained affected by the public health crisis and lockdown measures with revenue down -6.8%. Electronics posted strong growth of +6.6%. Healthcare remains fully committed to the fight against the pandemic and posted sales growth of +8.0%.

   -- Large Industries revenue saw a return to growth after a decline during 
      the 2nd quarter, and enjoyed +2.1% growth during the 3rd quarter. Air 
      gases and hydrogen volumes recovered in North America compared with the 
      2nd quarter, but remained below 2019 levels. The storms which hit the 
      Gulf Coast at the end of the summer had a limited impact on business. 
      Sales growth was strong in Latin America, driven mainly by the ramp-up of 
      new hydrogen units. 
   -- Industrial Merchant sales during the 3rd quarter (-6.8%) continued to be 
      affected by the decline in activity due to the public health crisis, but 
      improved markedly compared with the 2nd quarter which saw a fall in 
      revenue of -15.9%. In the United States, the Food, Pharmaceutical, 
      Research, and Retail and Craftsmen markets enjoyed sales that were close 
      to or higher than during the 3rd quarter of 2019, whereas sales to 
      industrial sectors such as Metal Fabrication and Energy continued to 
      decline despite a marked sequential improvement. Sales in Latin America 
      saw a return to growth and improvement was felt in the various countries. 
      Pricing impacts remained high in the region at +3.6%. 
   -- Healthcare revenue was up +8.0% during the 3rd quarter, marking a strong 
      improvement compared with the 2nd quarter (+1.0%). The United States saw 

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10-23-20 0135ET

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Sales 2020 20 606 M 24 571 M 24 571 M
Net income 2020 2 342 M 2 792 M 2 792 M
Net Debt 2020 12 283 M 14 647 M 14 647 M
P/E ratio 2020 28,0x
Yield 2020 2,01%
Capitalization 64 925 M 77 301 M 77 417 M
EV / Sales 2020 3,75x
EV / Sales 2021 3,52x
Nbr of Employees 67 000
Free-Float 97,1%
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Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 149,02 €
Last Close Price 137,60 €
Spread / Highest target 35,9%
Spread / Average Target 8,30%
Spread / Lowest Target -9,16%
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Benot Potier Chairman & Chief Executive Officer
Fabienne Lecorvaisier Chief Financial Officer & Executive Vice President
Thierry Peugeot Director
Jean-Paul Agon Lead Independent Director
Sin Herbert-Jones Independent Director
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