Air Liquide’s Q1 2018 revenue reached €5,010m ($6.121m), up 6,0% on a comparable basis. This can be credited to a more favourable economic environment which had a positive effect on all market sectors and on the activity of Air Liquide’s customers whose projects are more numerous.
The level of growth for the Q1 follows and already solid rise in sales observed in the Q4 of 2017 (4.5%). On a reported basis, Air Liquie’s revenue decreased 3.2% compared with Q1 2017 due to a strong negative currency impact (8.2%), a negative scope effect (0.7%, and a slightly negative energy impact (0.3%).
Gas & Services revenue totalled € 4,831m ($5,902m) for the first three months of the year, up 5.0% on a comparable basis, and down 4.3% as published compared with the same period in 2017, due primarily to the negative currency impact and a scope impact.
On a comparable basis, all geographies progressed. The developing economies recorded sales growth of 10.7% for Q1 of 2018.
Gas & Services sales rose this quarter for all activities:
Industrial Merchant sales grew 4.2%, with increases observed in all geographies, particularly the developing economies. In the Americas, demand was higher in all market segments and was particularly strong in the manufacturing sector. Airgas posted solid sales for packaged gases and hard goods. In Europe, activity remained robust despite an unfavourable calendar effect. All countries contributed to growth and demand remained dynamic in Eastern Europe. In Asia, China’s growth continued at a pace surpassing 15%, with bulk and cylinder volumes up substantially, particularly for the automotive, metal fabrication, and research sectors. Australia returned to growth. The global price effect at 2.1% for the Q1, has strengthened compared to the Q4 of 2017.
Large Industries posted sales growth of 6.0%, well above the Q4 of 2017. Large Industries was experiencing a clear recovery in Europe, due in particular to sustained demand for hydrogen (H2) for the refining and petrochemicals industries, as well as solid cogeneration activity in Benelux. In the Americas, activity was driven by higher air gas sales in the US and in Canada, and by the start-up of an oxygen (O2) production unit for a steelmaker in Argentina. In Asia, start-ups of air gas units in China and sustained demand for H2 in South Korea drove activity. High growth in the Middle East and Africa was attributable to the start-up of the world’s largest O2 production unit in South Africa and the contribution of the Yanbu H2 production facility in Saudi Arabia, which is running at full capacity.
Electronics revenue grew 5.7% in the Q1 of 2018, driven by double-digit sales growth in Asia and high sales of equipment and installations globally. Asia benefited from start-ups and ramp-ups of carrier gas production units in China and in Japan, and from demand for advanced materials which remains strong.
Healthcare sales remained solid, increasing by 4.9%. All regions posted growth in this quarter, and activity was particularly dynamic for the developing economies, most notably in South America. Home healthcare continued to grow and demand for home diabetes care remains strong. Growth was also driven by strong demand for specialty ingredients developed for the cosmetics industry. The Group continued its strategy of targeted acquisitions with two new acquisitions, in France and in Saudi Arabia.
Engineering & Construction sales resumed growth in the Q1 of 2018 after several challenging quarters and stabilisation in the Q4 of 2017, reaching €85m ($103m). The quarter saw further improvement in order intake.
Global Markets & Technologies revenue continues, with sales reaching €94m ($114m), an increase of 24.4% on a comparable basis. Every market segment was experiencing growth, with activity driven in particular by start-ups of biomethane production units and high sales in the maritime sector. In addition, H2 energy for mobility is continuing to develop.
The group is pursuing its efforts to reinforce competitiveness and generated operational efficiency gains of €79m ($96m). The cost and sales synergies linked to the acquisition of Airgas also continued during the Q1 of 2018, reaching a cumulative total since the acquisition of $237m.
Cash flow from operating activities before changes in working capital requirements for the first three months of the year reached €975m ($1,191m) and corresponded to 19.5% of sales.
Benoît Potier, Chairman and CEO of Air Liquide, commented, “For the first three months of this year, revenue growth was very solid on a comparable basis. It accelerated compared with the previous quarters in a more favourable economic environment. The activity level in terms of new customers’ projects was also higher.”
He continued, “All of our activities leveraged on this environment. The growth of Large Industries, driven by stronger demand in Europe and the start-ups and ramp-ups of new production units, is of particular note, as is the sustained growth of Industrial Merchant. This quarter was also marked by improvement in Engineering & Construction and the ever-dynamic development of Global Markets & Technologies. In addition, all geographies were up, especially Asia, with double-digit sales growth in China.”
“The group continues to generate recurring operational efficiency gains and new synergies related to the integration of Airgas. Cash flow remains high, allowing for further targeted investments. In the first quarter, our investment decisions amounted to nearly €600m ($733m) and will contribute to the future growth of the group.”
“Accordingly, assuming a comparable environment, Air Liquide is confident in its ability to deliver net profit growth in 2018, calculated at constant exchange rate and excluding 2017 exceptionals,” He concluded.