Air Liquide has posted solid 2016 annual financials, posting double-digit increases in Gas & Services revenues thanks the integration of Airgas operations.

The industrial gas giant’s performance in 2016, which includes Airgas revenues from 23rd May, 2016, was robust throughout and demonstrated increases in revenue, net profit and net earnings per share.

Chairman and CEO Benoît Potier explained, “With the acquisition of Airgas, a major achievement of the past year, the group has taken a major step forward in its geographic expansion and extension of its markets.”

Total consolidated revenue in 2016 reached €18.14bn ($19.23bn), a double-digit increase of 14.6% on a reported basis compared with 2015. Overall and on a comparable basis, group revenue rose by 0.9% due to the impacts from lower Engineering and Construction revenue.

Renewed focus

Following the Tier One corporation’s renewed focus on its Gas & Services sales after implementing its NEOS 2016-2020 strategy, revenue in this segment rose by 17.5%, totalling €17.33bn ($18.37bn). On a comparable basis, Gas & Services revenue grew by 2.7%.

On the whole, all businesses of its Gas & Services unit revenue rose on a comparable basis, with the exception of Industrial Merchant which remained contrasted by country and market segment.

Its Large Industries segment saw revenue increase by 5.4% due to start-ups and ramp-ups of production units in Germany, Poland, the US and China. Sales were also driven by the contribution of two hydrogen production units at the Yanbu site in Saudi Arabia which started up in the second quarter of 2015.

Following the Airgas acquisition, revenue in its Industrial Merchant unit skyrocketed by nearly 45% in 2016, but this activity was actually down by 1.6% on a comparable basis excluding the Airgas impact.

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Sales across Europe for Air Liquide were stable during the year, supported by increasing bulk volumes, relatively solid demand in France, Spain and the UK and high demand in Poland and Russia. Its cylinder business in the region, which was generally weak in 2016, showed some signs of stabilisation towards the end of the year.

Energy and metal fabrication markets in North America were down as compared with 2015 but agri-food and pharmaceuticals markets continued to grow for the company. In Asia-Pacific, sales in Japan recorded a slight increase in the second half of 2016 whilst China posted solid growth over the full year and strong growth in the fourth quarter of 2016.

Revenues in its Electronics sector also grew, rising by 4.3% following strong sales in the first half of the year. Despite the second half being slower, marred with slower sales of equipment and installations and the high price of neon in 2015, growth was steered by demand from China, Singapore and Taiwan due to solid sales of carrier gases in Asia.

Healthcare revenue showed a double-digit surge of 11.2% including the contribution of Airgas via its sales of medical gases to hospitals. On a comparable basis, sales were up by 4.9%, benefitting from strong demand for home healthcare services and robust hygiene sales.

However, its Engineering and Construction segment continued to be Air Liquide’s undoing, with revenue plummeting by 38% to €474m ($502m) on a comparable basis. The company attributes this to the slowdown in large-scale projects related to energy and the lower number of new projects.


Air Liquide generated recurrent efficiency gains of €315m ($333m) during the year, hitting its target of more than €300m ($318m) per year as outlined by it NEOS plan. In addition, the first synergies related to Airgas reached $45m (Air Liquide is forecasting a total of more than $300m of synergies with Airgas before the end of 2018).

Operating income recurring rose by 5.9% to €3.02bn ($3.2bn) and the group’s operating margin at 16.7% reflects the effect of the Airgas consolidation.

In addition, cash flow before change in Working Capital Requirements (WCR) reached €3.52bn ($3.73bn), which is 19.4% of the year’s total revenue and an increase of 30.5% compared with 2015.

“Air Liquide is implementing its transformation, which combines targeted investments, digital development, and innovations to fuel growth in the coming years”

Benoît Potier, CEO and Chairman, Air Liquide

During the year, Air Liquide’s debt-to-ratio exceeded forecasts and was lowered to 90% at the end of the year and its return on capital employed after tax (ROCE) stood at 7.8%. The group’s target, set as part of its NEOS programme, is to reach again ROCE above 10% in the next five to six years.

On the back of these positive, full-year financials, Potier was optimistic about Air Liquide’s future prospects and underlined, “With the integration of Airgas and the launch of the NEOS programme for the period 2016-2020, Air Liquide is implementing its transformation, which combines targeted investments, digital development, and innovations to fuel growth in the coming years.”

“Assuming a comparable environment, Air Liquide is confident in its ability to deliver net profit growth in 2017,” he added.