Air Liquide’s operating performance remains solid after a third quarter which saw group revenue rise 4.3% to €3.8bn compared with third quarter (Q3) 2013, and up 1.0% on a reported basis.
Gas & Services sales rose 3.6% on a comparable basis, in line with the second quarter trend, and were stable (+0.1%) as published. On a comparable basis, all Gas & Services business lines grew in Q3 2014.
Such a performance saw Air Liquide grow faster than the market in Q3, as acknowledged by Benoit Potier, Chairman and CEO of the Air Liquide Group.
“In a more contrasted economic environment, the third quarter was marked by good momentum in the Americas and Asia-Pacific, by vigorous revenue growth in developing economies of more than 15% on a comparable basis, and by another slowdown in Western European manufacturing,” he commented.
“Overall, the Group grew faster than its market, assessed on the basis of the weighted industrial production index.”
Air Liquide’s Large Industries business benefited from start-ups and the ramp-up of new units, as well as sustained demand for air gases and hydrogen in the developing economies of the Asia-Pacific, and China in particular. As a result, revenues were up 3.6%.
For Industrial Merchant, up 1.8%, performance contrasted depending on the region. Demand remains robust in North America, it seems, with sales to oil services in Canada up this quarter in particular. The Industrial Merchant business continues to grow at a rapid pace in the developing economies of the Asia-Pacific region. In Europe, sales showed improvement in Spain and the UK, while other Western European countries were impacted by the slowdown in industrial production. In Eastern Europe, however, sales continue to grow.
Electronics growth was a robust 11.7%, driven by higher sales of specialty gases in the US and Asia, as well as the success of the ALOHA™ advanced precursor range in Taiwan, Japan, and the US.
One business unit that bucked the contrasted trend geographically was Healthcare, with revenues up 3.5% and having progressed across all regions. This was boosted by the increased need for home healthcare services, as well as the development of the group’s Healthcare activities in developing economies and higher hygiene sales.
Meanwhile Engineering and Technology revenue rose by 18.0% on a comparable basis, reflecting progress made on projects underway for third-party customers.
It is important to note that the unfavourable currency translation effect observed in first half 2014 slowed in Q3 (-1.1% at the group level), while efficiency gains - which on 30th September (2014) stood at €233m - also contributed to the group’s operating performance for the period.
Nonetheless, Air Liquide is confident of meeting its objectives for the year. Potier added, “The group’s operating performance remains solid. Ahead of its annual efficiency objective, the group continues to adapt to market conditions to strengthen its competitiveness. At the same time, it continues to invest and take growth initiatives, particularly in promising markets and in developing economies. Accordingly, the proportion of Gas & Services revenue for industry that is generated in developing economies today exceeds 30%.”
“In this context and barring a degradation of the environment, Air Liquide is confident in its ability to deliver another year of net profit growth in 2014.”