Air Liquide has declared its third quarter 2008 results and revealed a healthy performance across the board, despite the ongoing financial crisis and natural disasters such as Hurricanes Gustav and Ike.
The impact of the current global economic uncertainty still poses lingering questions however, and ‘reduces visibility for the year’s end’ according to the group.
Despite the credit crunch and its effect on industry, Air Liquide maintains belief in its ability to deliver double-digit growth in 2008 net profit.
Announcing its strong Q3 2008 results, Air Liquide recorded revenue of €3.247m at an increase of 10.4% as published (+13.1% at constant exchange rates).
Gas & Services revenue rose by an impressive 9.6% on a comparable basis, to reach €2.760m in line with the high growth rates recorded since the fourth quarter 2007. Industrial Merchant also showed very good performance, in particular in emerging economies.
Key growth drivers
Air Liquide cites its development based on five key, long term growth drivers, notably Energy, Environment, Emerging Economies, Health, and High-Tech.
Meanwhile, in its Third Quarter 2008 Management Report the company reflects on the ‘sustained demand in our key markets, namely steel, chemicals and refineries’ and notes that its strategically spread presence in 75 countries has contributed to strong bulk demand.
Strong demand for hydrogen, unit start-ups and ramp-ups in Europe and Asia contributed to the sustained growth in the company’s Large Industries sector, despite the impact of hurricanes in the Gulf Coast.
Healthcare is reported as ‘still solid in a context of increased cost-containment in the national health systems’ and perhaps expectedly, revenue in Electronics improved slightly compared to that of second quarter 2008. This is attributed to good progress in carrier gases.
The execution of Air Liquide’s ALMA program is on track with the objectives, as the company maintains its efforts to reach the objectives of the efficiency programs and to compensate for the increase in costs of recent months, through an adapted pricing policy.
Benoît Potier, Chairman and CEO of the Air Liquide group, reflected, “The growth in revenue of 10.4% in the third quarter illustrates the momentum the group has enjoyed for several quarters in its development.”
“The uncertainties in the worldwide economy due to the financial crisis reduce visibility for the year’s end, even though our markets remain well oriented. In this context and excluding a significant slowdown of end-user markets, we remain confident in the ability of Air Liquide to achieve double-digit growth in 2008 net profit at constant exchange rates. Furthermore, we confirm our investment decisions for 2008 at more than €2bn.”
Performance in each of the major regions appears healthy for the French gases group, boosted by significant acquisitions and investments around the world.
In Europe, Q3 2008 revenue totalled €1.5bn and rose by 9.6%, with particularly good growth shown in the Large Industries sector (24.4% growth for quarter). A similar growth rate of 25% was seen in the electronics business in the Americas, where company revenue reached €683m and rose by 9.3%. Industrial Merchant business progressed by 11.9% in the US, following pricing initiative and good demand.
Industrial Merchant was also a prominent performer in the Asia-Pacific region, where revenues of €517m showed an increase of 8.2% and were driven by ‘buoyant growth’. In the mature Japanese market, the company noted that ‘demand was stable’. Demand for oxygen by Japanese steelmakers was reportedly strong in Q3, contributing to sustained growth of 16.1% in the Large Industries division.
In the Middle East and Africa, both rapidly emerging industrial gas markets, Air Liquide boasted revenue of €55m – a sharp rise of 30.2% and largely as a result of a number of new business developments.