Financial Reports provided by Spiritus Consulting, a leading provider of knowledge management and consulting services.

Spiritus’ mission is to provide expert knowledge on the industrial gas industry to businesses or organisation in order to assist them in enhancing their decision making processes on issues related to industrial gases, equipment and services.

Spiritus gives independent advice based on in-depth knowledge and experience of the industrial gas industry. The Spiritus Quarterly Reports pull together the financial results of the top tier industrial gas companies and consolidates them into an industry index of performance. For more information, please contact Spiritus Group.

Executive Summary

The global economy in the fourth quarter of 2011 remained both challenging and with clear regional variances that are significantly impacting on the industrial gases business and the investments being made.  Growth in Q4 slowed to around 2% YoY, less than half the rate for the full year 2011.

For Q4 11, Spiritus’ analysis of performance shows:

  • The six leading industrial gas companies total gas revenue growth of $15.6BN slipped below Q3 but was +5% up YoY;
  • Underlying revenue growth also eased further to +3.4%, driven equally by higher gas volumes and pricing (both +1.7%). While pricing gains were maintained throughout the year, volume growth slowed significantly;
  • The impact of Natural Gas pass-through was modest globally at +0.6% with contrasting patterns for natural gas prices between regions;
  • Currency Effects were nil overall;
  • Acquisition activity made a modest positive contribution across the industry in Q4 at +0.3% – with some small packaged gas acquisitions impacting;
  • Average EBIT margin slipped vs Q3 to 16.8%, similar to the previous year as revenues grew modestly but price improvements and efficiency programme continued to face headwinds from cost pressures;
  • Average ROCE, at 12.3%, slipped significantly vs Q3 as EBIT pressures increased at the same time as capital employed continue to growth strongly.
  • Major strategic events and trends included:
  • General slowdown of revenue growth (mainly bulk / packaged gas market volumes and electronics) across Asia / FE and Europe but improvement in Americas;
  • Further trending up of global capex / sales ratio – continued focus on investment in emerging markets.

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