Cyclical sectors and a weak economic environment have taken their toll on Air Liquide’s first quarter 2009 revenues, though the company remains resilient amidst difficult trading conditions.

Despite the turbulent economy, group revenue for the first quarter 2009 was €2.997m, down 3% as published.

Sales for the company’s Gas & Services division declined to €2.548m, down 4.2% on a comparable basis, though Air Liquide draws on a broad and ‘solid’ mix of activities across varying markets and optimism prevails.

The company notes that activity in Q1 was marked by ‘significant disparities’ between geographic zones, markets and products and therefore, cyclical sectors experienced a reduction in volume in excess of 30%. However, defensive sectors generally resisted, subject to volume declines of less than 10%.

Offset
This deterioration was partially offset, notably by start-ups and ramp-ups of new units and the effect of pricing campaigns. In this context, first quarter revenue illustrates the group’s resilience.

Reflecting on this sense of resistance, Benoît Potier, Chairman and CEO of the Air Liquide Group, stated positively, “Despite weak global industrial production in the first quarter 2009, group revenue was broadly resilient due to the solid mix of activities across different markets and the recent start-up of new units. This reflects the robustness of our business model.”

“The positive signs first observed at the end of the quarter do not yet provide indications of a trend. Thus, the recovery in our markets could take longer. Under these conditions, we have repositioned our objective for the whole of 2009 for revenue and net income to be close to the 2008 levels. We have also strengthened cash management and increased our cost reduction efforts, for this year, to €300m.”

The company’s Large Industries business benefited both from the commissioning of new units and the structure of long-term contracts – continuing to achieve sales growth.

Industrial Merchant recorded a decline in activity, but less than global industrial production, while Healthcare continues to grow driven by homecare and thanks to new contracts, in particular in Great Britain.

Confident
Despite the air of negativity at present, Air Liquide also draws comfort from a number of first quarter highlights and confidence remains unperturbed.

In its ALMAprogram, priorities were reinforced on cash, cost and capex control, while a number of start-ups and ramp-ups of new units also affords light at the end of the tunnel - in particular in Europe, China and the Middle East.

Numerous contracts with world leaders in the photovoltaics field have been agreed in Europe, the US and Asia.

Affirming the group’s confidence, Potier concluded, “In the medium term, the group remains confident in the structural growth potential of the Energy, Environment, Health and High-Tech markets as well as in Emerging Economies. The portfolio of opportunities remains solid and a large majority of start-ups for 2009-2010 have been confirmed.”