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

AIR LIQUIDE

(AI)
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Air Liquide : Q3 2020 Revenue -3-

10/23/2020 | 01:36am EST
      an increase in demand for medical liquid oxygen to fight Covid-19 and 
      benefited from a recovery in proximity care. In Latin America, the 
      Healthcare teams remain highly committed to the fight against Covid-19 
      with sales to hospitals up markedly, in particular in Argentina and 
      Brazil. The number of patients treated at home was also up. 
 
   -- Electronics revenue was up +6.6%, with very high Equipment & Installation 
      sales during the quarter. 
 
Americas Air Liquide announced a long-term supply agreement with Eastman 
Chemical Company to provide additional gaseous oxygen, nitrogen and syngas 
supporting Eastman's growth in Longview, Texas. Air Liquide will invest more 
than 160 million U.S. dollars to modernise existing assets and build a new Air 
Separation Unit (ASU) and Partial Oxidation Unit (POX). 
 

Europe

Revenue in Europe totaled 1,615 million euros over the 3(rd) quarter, posting growth of +0.5%. Industrial activities saw a significant recovery across the region, although volumes remained below pre-public health crisis levels. Large Industries sales (-3.4%) grew sequentially compared with the 2(nd) quarter of 2020. In Industrial Merchant (-4.8%, of which -1.9% from minor divestments), cylinder gas sales returned to a level similar to the 3(rd) quarter of 2019. Healthcare revenue was up +9.5% during the 3(rd) quarter, driven by sales of ventilators at cost price, that remained exceptionally high due to the pandemic.

   -- During the 3rd quarter, Large Industries sales were down -3.4% but grew 
      sequentially compared with the 2nd quarter, which marked the peak of the 
      public health crisis. Demand for air gases remained weak in the Steel 
      sector. Volumes improved slightly quicker for Chemicals customers than 
      for Refineries which have adjusted their production in response to weaker 
      demand for transportation fuel. Air gases sales were up over the quarter 
      in Russia and Turkey. 
 
   -- Industrial Merchant revenue was down -4.8%, of which a -1.9% minor scope 
      impact, due to the balance of small disposals and bolt-on acquisitions 
      carried out as part of the portfolio management program. Cylinder gas 
      sales improved and returned to a level similar to the 3rd quarter of 2019 
      notably thanks to the restart of construction activities. The recovery 
      was slower for liquid gas sales, particularly in Germany. Revenue growth 
      was strong in the eastern part of Europe, in particular in Turkey, Russia 
      and Poland. Pricing impacts remained solid at +1.7%, marking an increase 
      compared with the 2nd quarter (+1.4%). 
 
   -- Healthcare revenue was up +9.5% during the 3rd quarter. Ventilators sales, 
      at cost price, were once again particularly high, due to the pandemic. 
      Medical gases sales remained high. Home Healthcare saw a return to more 
      dynamic growth following the slowdown in new homecare installations 
      during the 2nd quarter, at the peak of the pandemic. This was notably 
      driven by an increase in the number of patients treated at home for 
      diabetes in Germany, France, Spain and Portugal, as well as the 
      contribution from new bolt-on acquisitions. 
 
Europe Air Liquide announced an investment of 125 million euros in July to 
build the first world-scale Air Separation Unit (ASU) for oxygen production 
with an energy storage system that helps facilitate more renewable energy on 
the electricity grid due to its grid stabilizing capability. This highly 
efficient plant, with circa 10% less electricity consumption, will have a 
production capacity of 2,200 tons of oxygen per day, and will be built in Port 
of Moerdijk in the Netherlands. This project illustrates Air Liquide's 
strategy to grow in strategic industrial basins, and the Group's ability to 
design and implement innovative solutions contributing to the energy 
transition, in line with its Climate Objectives. Air Liquide and KGHM Polska 
Mied , one of the largest producers of copper and silver in the world, have 
signed a new long-term contract for the supply of oxygen and nitrogen at the G 
ogów site in Poland. Air Liquide will invest around 40 million euros in 
the construction of a state-of-the-art Air Separation Unit (ASU) which offers 
high levels of energy efficiency and reliability. In addition, the extended 
liquid argon production will support growth of the Industrial Merchant 
business in Poland. 
 

Asia-Pacific

Revenue in Asia-Pacific reached 1,101 million euros, up +1.6%. In China, momentum was strong across all industrial business lines growing at +7.6%. The recovery was slower in the rest of the region, impacted by the public health crisis. Large Industries (+3.0%) was driven by demand in China and the ramp-up of a unit in South Korea. Industrial Merchant (-4.0%) was still sluggish, but recovered compared with the 2(nd) quarter. Electronics (+6.3%) remained very strong with growth exceeding +10% excluding Equipment & Installation sales.

   -- Large Industries sales were up +3.0% over the quarter. These were driven 
      by the takeover of an Air Separation Unit and a strong increase in oxygen 
      volumes for Steel and Chemicals in China, coupled with the ramp-up of a 
      hydrogen unit in South Korea. The recovery was slower in the rest of the 
      region, notably in South East Asia and Japan, where volumes remained 
      weak. 
 
   -- Industrial Merchant revenue was down -4.0%, but grew sequentially 
      compared with the 2nd quarter. Activity in China improved markedly at 
      +8.3%, driven notably by the Manufacturing, Construction, Glass, Retail 
      and Craftsmen, and Research markets. Business remained sluggish across 
      the rest of the zone, held back by the public health crisis, in 
      particular in Japan and Singapore, but nonetheless improved compared with 
      the 2nd quarter. Pricing impacts in the region were marginally negative 
      at -0.5%, with helium prices stabilizing during the 3rd quarter. 
 
   -- Electronics sales were up markedly (+6.3%) during the 3rd quarter and 
      improved by +10.3% excluding Equipment & Installations. This growth was 
      driven by Advanced Materials and Carrier Gases, notably with the supply 
      ramp-up of Advanced Materials in South Korea and of Carrier Gases in 
      China, Taiwan and Japan. 
 
Asia-Pacific Air Liquide China will invest around 60 million euros to build an 
Air Separation Unit (ASU) in the Lingang Economic District, Tianjin Port Free 
Trade Zone. Air Liquide has been supplying industrial gases to this major 
Chinese industrial basin for more than 25 years. The investment is secured by 
a new long term supply agreement with a major customer. This facility will 
also incorporate a dedicated capacity to supply liquid and packaged gases to 
Industrial Merchant's customers as well as hospitals requiring high-purity 
medical gases. It is planned to be operational in 2022. Air Liquide China 
operates seven ASUs in Tianjin, as well as a multi-sourced pipeline network 
that delivers oxygen, nitrogen and hydrogen to adjacent customers. 
 

Middle East and Africa

Middle East and Africa revenue stood at 145 million euros, stable (+0.0%) compared with the 3(rd) quarter of 2019. In Industrial Merchant, Middle East and India improved clearly compared with the 2(nd) quarter, with the recovery more contrasted in Africa. Large Industries sales were up slightly compared with the 3(rd) quarter of 2019, notably in South Africa and Saudi Arabia. Healthcare, which continues to be committed to the fight against COVID-19, posted strong growth across the region.

Engineering & Construction

Consolidated Engineering & Construction revenue reached 60 million euros in the 3(rd) quarter, with sales to third-party customers remaining sluggish due to the public health crisis. These sales were down -24% compared with the 3(rd) quarter of 2019, with resources mainly allocated to internal Large Industries and Electronics projects. The decline in total sales was more modest at -19%.

Order intake has improved since the end of the summer and reached 428 million euros, of which more than half was in Asia. This mainly related to Air Separation Units and ultra-pure nitrogen production units, with orders for the Group slightly exceeding those for third-party customers.

Global Markets & Technologies

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 restricted by the public health crisis. Equipment sales were up markedly, in particular membrane purification systems. The biogas business remained strong, in particular in Europe where biomethane sales for transport were up, and in the United States.

Order intake for Group projects and third-party customers reached a record level of 485 million euros, a significant increase of +34% over 2019 following the signature of several major contracts during the 1(st) half of the year. These notably included major contracts for helium cryogenic refrigerators and Turbo-Brayton LNG reliquefaction units.

 
Global Markets & Technologies Air Liquide has acquired 80% of the capital of 
the French company Cryoconcept, which specialises in dilution refrigeration -- 
a technology allowing to reach very low temperatures. This transaction enables 
Air Liquide to strengthen its expertise in the field of extreme cryogenics, or 
close to absolute zero, to propose a broader offer and accelerate the 
development of Cryoconcept's activities. 
 

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10-23-20 0135ET

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Financials
Sales 2020 20 606 M 24 975 M 24 975 M
Net income 2020 2 343 M 2 839 M 2 839 M
Net Debt 2020 12 282 M 14 886 M 14 886 M
P/E ratio 2020 27,4x
Yield 2020 2,05%
Capitalization 63 510 M 77 075 M 76 974 M
EV / Sales 2020 3,68x
EV / Sales 2021 3,45x
Nbr of Employees 67 000
Free-Float 97,1%
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Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 149,52 €
Last Close Price 134,60 €
Spread / Highest target 38,9%
Spread / Average Target 11,1%
Spread / Lowest Target -7,13%
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Managers
NameTitle
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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