Air Liquide sees return to growth in the Q1 2010

Supporting the sense of upswing in the industrial gases community, Air Liquide has a revealed a resounding return to growth in first quarter (Q1) 2010.

Gas & Services sales for the Q1 of 2010 reached €2.761m, up 8.3% on a comparable basis over Q1 2009, reflecting the increase in volumes consumed by customers.

Group revenue also saw a strong increase, at constant exchange rates, and totalled €3.152m – up 5.1%. A slightly positive currency impact is cited as offsetting the minor decline in natural gas prices.

Overall it’s an extremely positive quarter for Air Liquide; all businesses and geographies have recorded healthy percentage rises, while debt remains stable and operating margin was slightly above the 2009 average.

In the group’s Gas & Services business, activity is still contrasted between mature economies (+5% compared to Q1 2009) and emerging economies (+28%) and the Large Industries sector recorded a rebound in activity – particularly due to start-ups and ramp-ups in China, South America and the US.

Industrial Merchant activity is gradually returning to growth, although revenues in mature economies remain lower than pre-crisis levels in Q1 2008. Electronics experienced a rebound helped by sales of specialty gases. Healthcare remains typically solid and robust, still buoyed by homecare.

Commenting on the first quarter results, Benoît Potier, Chairman and CEO of the Air Liquide Group, said in a statement, “In a context that remains contrasted, this first quarter of 2010 marks the return to growth, especially in Gas & Services, which is up compared both to 2009 and the high levels of 2008. It also shows a solid operating performance.”

“The expected number of start-ups, the recovery of investment projects and the confirmation of the group’s efficiency potential allow us to maintain our objective for the year.”

Highlights
In addition to a number of highlights throughout the year’s start, including numerous new contracts in China, further acquisitions in healthcare, production plant start-ups in emerging economies, and new production capacities of bulk gases in India, Q1 2010 saw the recovery of volumes continue.

While this remains moderate in mature economies and the Industrial Merchant business in particular, sustained growth was seen in the Healthcare sector and strong demand reported from the emerging economies.

The group also pursues its efficiency programs, with the objective of achieving over €200m in efficiency gains in 2010.

In the group’s home market of Europe, hit hard by the global recession on so many levels, there were encouraging signs. Revenue totalled €1.497m, up 3.8%, attributable to the continued turnaround in all markets.

Industrial Merchant reported a slight 1.8% decline, with performance varying from country to country, but emerging economies increased by 30% due to the steady growth in demand and new facilities. Healthcare increased by 5.0% for the quarter, due to the steady growth in Homecare and includes the consolidation of DinnoSanté, acquired at the start of the year.

Meanwhile, Electronics sales rose sharply by 28.6% – denoting a clear turnaround due to recovering demand for specialty gases in the semiconductors industry and new Equipment and Installation sales.

Outlook
Looking ahead, Air Liquide anticipates a continuation of the return to growth seen in Q1.

The quarter was marked by the return to growth in a contrasting environment, with cost management remaining disciplined and the potential for efficiency gains confirmed.

In this context, and barring a major economic upset, Air Liquide expects continuous growth in net profit in 2010, in line with its long-term performance.

Potier added, “In this context, and barring a major economic upset, Air Liquide expects continuous growth in net profit in 2010, in line with its long-term performance.”