Air Liquide Q3 2017 group revenue reached €4.944m ($5.814m), an increase of 3.5% compared with Q3 2016. Revenue was nearly flat at 0.3%, impacted by a currency impact that turned negative this quarter.
Gas and Services revenue totalled €4.787m ($5.630m) was up 4.0% compared to Q3 2016. This reflects an acceleration in sales growth compared with the previous two quarters, despite the limited impact of the hurricanes in the US.
Industrial Merchant experienced increased sales in all regions. However, the developing economies were particularly strong. In Europe, sales growth of 4.2% was driven by increased bulk and cylinder volumes, as well as positive price impact. Business momentum was strong in Italy, Iberia, France and Benelux.
In North America, the recovery was confirmed, notably with higher volumes. In the US, sales improved in almost all market segments, whereas in Canada they were driven by the energy and metal fabrication sectors. Asia-Pacific enjoyed strong sales in China, where growth exceeded 15%, due to an increase in both prices and volumes. At the global level, the price impact for the World Business Line was positive at 1.3%.
Large Industries revenue increased by 2.0%. Excluding the impact of hurricanes in the US, sales were up 3.2%. The situation in North America was contrasted. Activity in the US was impacted by customer unit shutdowns due to the hurricanes, in particular refineries, whereas sales growth in Canada was driven by greater demand for oxygen from steel producers. In Europe, hydrogen demand increased at the end of the quarter, however revenue for the region remained impacted by the cessation of operations in Ukraine. Sales in Asia-Pacific grew markedly (8.1%) due to production unit start-ups in China and strong customer demand in both China and South Korea. Finally, in the Middle-East, growth continued to be driven by the hydrogen production units in Yanbu, Saudi Arabia.
Electronics sales, which were up 7.2%, saw a strong growth level, thanks in particular to high demand in China and Taiwan. All regions contributed to growth. Carrier gases sales remained robust while equipment and installation sales were up slightly this quarter. Demand for Advanced Materials continued to be sound with revenue growth in this product category of almost 30%.
Healthcare continued its steady growth, up 4.5%. It benefited from sustained demand in home healthcare services and robust specialty ingredients and medical equipment sales. Activity was particularly strong in developing economies, in particular in South America, which posted double-digit revenue growth. Acquisitions also contributed to growth in countries such as in Canada or Japan.
Engineering and Construction revenue totaled €75m ($88m) this quarter, down 25.1% on a comparable basis, as a result of the low level of order intake in 2016. Order intake since the beginning of 2017 has improved significantly compared with last year.
Global Markets and Technologies revenue amounted to €82m ($96m) this quarter. This represented an increase of 13.2% on a comparable basis, in line with the two previous quarters. Sales were particularly strong in the maritime and biogas sectors. Moreover, the group made an acquisition in the biogas sector in Norway this quarter.
The group continues to strengthen its competitiveness. Cumulated operational efficiency gains since the beginning of the year reached €229m ($269m), in line with the annual target of more than €300m ($352m). Airgas acquisition synergies are a few months ahead of annual forecasts thanks to quicker project execution. The group has therefore revised its synergies target upward for 2017 and now forecasts by year end 2017 a cumulated delivery of $195m in synergies since the acquisition, versus the $175m previously announced.
Cash flow from operating activities before changes in Working Capital Requirements increased and amounted to €2.9bn ($3.4bn) at 30th September 2017, allowing the net debt level to be brought back below €15bn ($18bn).
Benoît Potier, Chairman and CEO of Air Liquide, commented, “Assuming a comparable environment, Air Liquide is confident in its ability to deliver net profit growth in 2017.”