Air Liquide has posted solid revenues for the second quarter of 2017, thanks to the Airgas consolidation and recovery in Industrial Merchant.

Group revenue for the first half of 2017 grew by 28.4% to reach €10.293m ($12.047m), benefiting from the consolidation of Airgas sales for the entire semester. Adjusted for major changes in the portfolio, the first half revenue growth was 5.7%.

On a comparable growth basis, group revenue increased by 1.8% over the first six months, to which are being added a positive currency effect of 1.7% and a favourable energy impact of 2.2%. Growth in the Q2 of 2017, which was 2.0% on a comparable basis, is slightly higher than in the first quarter of 2017. Gas and Services sales rose steadily, while Engineering and Construction remained weak in a challenging environment.

Gas and Services sales reached €9.978m ($11.700) for the first half of 2017, up 31.0% as published. On a comparable basis, growth was 2.7% in the Q2, in line with the Q1, despite a highly unfavourable impact of working days in Europe.

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

Benoît Potier, Chairman and CEO of Air Liquide

All Gas and Services activities contributed to sales growth over the first six months of this year, in particular Industrial Merchant:

Industrial Merchant

Industrial Merchant experienced a solid growth of 2.8%, driven by all economic sectors. The improvement observed in the first quarter of 2017 in North America and Europe is confirmed and includes both bulk and cylinder volumes. In Asia, sales also increased in the Q2, particularly in China, where double-digit growth was recorded, and in Japan. In developing economies, revenues rose by 7.2%. Globally, the price effect for the period reached 1.2%, and is slightly positive in Europe after two years of decline.

Industrial Merchant experienced a solid growth of 2.8%, driven by all economic sectors. The improvement observed in the first quarter of 2017 in North America and Europe is confirmed and includes both bulk and cylinder volumes. In Asia, sales also increased in the Q2, particularly in China, where double-digit growth was recorded, and in Japan. In developing economies, revenues rose by 7.2%. Globally, the price effect for the period reached 1.2%, and is slightly positive in Europe after two years of decline.

Large Industries

Large industries revenue grew by 2.2% and was contrasted among geographic zones. Demand remained strong in North America. Sales were down in Europe, reflecting temporary maintenance turnarounds and the end of operations in Ukraine, although volumes were improving sequentially to meet demand from refineries and steelmakers. Sales from cogeneration were lower due to decreasing electricity prices in Europe and North America. In Asia, growth was driven by the ramp-up of an air separation unit (ASU) in Australia and strong demand in Japan, Singapore, and South Korea. China was impacted by temporary customer maintenance turnarounds. In the Middle East, the Yanbu hydrogen production site in Saudi Arabia is running at full capacity.

Electronic sales were stable at 0.4%, compared to the high first half of 2016, which saw strong sales of equipment and installations. Excluding sales of equipment and installations, activity remained dynamic, growing by 7%, especially in the US and Asia. In Taiwan and China, growth came in above 10%. Demand for advanced molecules continued to be strong, with double-digit sales growth.

Healthcare

Healthcare revenue, up 4.5%, continued its development, driven by the steady growth of Home Healthcare, Hygiene and Speciality Ingredients. In the Americas, Home Healthcare is progressing strongly in Canada, brazil, and Argentina. In Europe, sales were impacted by less working days for medical gases in the Q2 and a weak contribution from complementary acquisitions. However, Home Healthcare remained dynamic there, particularly in the field of diabetes. The development of Hygiene and Speciality Ingredients continued across the globe at a steady pace. In the developing economies, Healthcare sales continued to increase, with strong growth of 18% for the first six months of 2017.

Engineering and Construction

Engineering and construction sales stood at €146m ($171m) for the first six months of the year, down 43.3% on a comparable basis due to the low level of order intake in 2016. The overall environment remains difficult, but is showing signs of improvement. Order intake, particularly for the Chemicals and Energy sectors in China, increased significantly over the period to reach €329m ($386m).

Global Markets and Technologies

This segment continues to develop, reporting comparable growth for the first six months of 16.4%, with sales of €169m ($198m). The biogas and space segments were particularly dynamic.

Efficiencies

The group continues to reinforce its competitiveness. Efficiency gains reached €148m ($173m) for the first six months of this year, in line with the target of more than €300m ($351m) a year. In addition, the synergies related to Airgas have reached a cumulative total of $138m ($162m) since the acquisition, in line with group’s forecasts.

Comment

Commenting on the first six months of 2017, Benoît Potier, Chairman and CEO of Air Liquide, said, “The group’s performance in the first half of 2017 was solid, with further growth in revenue and net profit, as well as an improvement in the operating margin. Sales benefited from the end of the Airgas consolidation effect and positive currency and energy impacts.”

“The Group’s operational performance also improved further in the first half of 2017: the new efficiencies and synergies associated with Airgas contributed to the higher operating margin and net profit. Lastly, the group’s balance sheet remains robust, benefiting from strong growth in cash flows and well controlled debt.”

Investment decisions continued during the first half of the year, and the group can rely on €2.0bn ($2.3bn) investment backlog to support its future growth. With Airgas now fully integrated, Air Liquide is focused on executing its mid-term strategic plan.”

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