Air Liquide has this morning released its 2019 annual financials, reporting a “landmark year” for performance, investments and commitment to climate.
Commenting on the results, Benoît Potier, Air Liquide Chairman and CEO, said, “2019 is a landmark year, characterised simultaneously by a significant improvement in performance, a high level of investments to serve our customers and strengthen our efficiency, and the operational implementation of our climate action plan.”
In 2019, efficiencies increased markedly by 23.4% to €433m, compared with €351m in 2018.
According to Air Liquide, these represented savings of 2.7% of the cost base and largely exceeded the objective, which had been set at more than €400m after the reinforcement of the program at the beginning of the year.
The main drivers of this increase in efficiencies are the roll-out of digital tools, the continuation of the realignment plans and the ramp-up of Airgas within the program.
The Group’s operating income recurring (OIR) reached €3.8bn for 2019, a published increase of 10%, or 7.5% on a comparable basis.
The operating margin (OIR to revenue) stood at 17.3%, a marked improvement of 90 basis points compared to 2018 and of 70 basis points excluding the energy impact, including 10 basis points from the application of IFRS 16.
The Gas & Services operating margin stood at 19.1%, an improvement 60 basis points compared with 2018 excluding the energy impact.
Net profit (Group share) amounted to €2.2bn in 2019, an increase of 6.1% as published and 6.7% excluding the application of IFRS 16.
Excluding the capital loss on the disposal of the Fujian Shenyuan units in 2019 and the non-recurring financial gain in 2018, recurring net profit Group share was up 11.1%.
Cash flow from operating activities before changes in working capital requirement totalled €4.86bn and stood at 22.2% of Group sales (21% excluding the application of IFRS 16).
This represented strong published growth of +14.5% (+8.3% excluding the application of IFRS 16).
In 2019, gross industrial capital expenditure for the Group amounted to €2.6bn, a major increase of 17.2% compared to 2018. It represented 12% of sales.
The net debt-to-equity ratio stood at 64% at the end of December 2019, an improvement of -480 basis points compared to the end of 2018.
Industrial and financial investment decisions represented a total of €3.7bn euros in 2019, a 19.8% increase compared with 2018.
Industrial investment decisions reached a record high of €3.15bn, with major investments for long-term contracts with Large Industries customers, mainly in strategic basins where the Group is already present.
The 12-month portfolio of opportunities remained strong and totalled €2.9bn, an increase compared with €2.6b at the end of 2018.
Recurring ROCE, which excludes the capital loss on the disposal of the Fujian Shenyuan units on net profit, stood at 8.6%, i.e. a +60 basis points improvement compared to the end of December 2018.
This improvement is in line with the Group’s NEOS target of returning to a ROCE of above 10% by 2021-2022.
Regarding to the extra financial performance of the Group, lost time accident frequency improved and reached 1.2 at the end of 2019.
This represents the lowest employees lost time accident frequency rate of the last 20 years.
In 2019, the Group’s carbon intensity declined further and reached 4.6kg of CO2 equivalent per euro of EBITDA.
It is lower than the initial forecast, notably from the disposal of the Fujian Shenyuan units but also because of several customer maintenance turnarounds, leading to lower production volumes, Air Liquide explained in a statement.
In January 2020, the Group’s commitment has been rewarded twice by the CDP, who gave Air Liquide the highest grade “A” both for its actions in favour of climate and its sustainable management of water.
In addition, Air Liquide had 29% of women among engineers and managers in 2019 and aims to reach 35% by 2025.