First Half 2010 Results: Solid progression of sales and profits

First half 2010 performance

• Solid growth in both revenue, up +9.7%, and net profit, up +13.3% versus H1 2009
• Significantly improved operating margin: up +160 basis points at 16.6%
• Increase in operating cash flow: up +16.7%
• Recovery of volumes and new projects signed

Highlights

• Strong growth in emerging economies (large number of contracts signed in China)
• Site takeovers in an environment where customers are increasingly outsourcing their gas production
• New liquid production capacities (in Brazil, India and Russia) and new solar energy contracts in Asia
• Healthcare: continued acquisitions in homecare and expansion of the service offering
• Award of project to build the world’s largest helium production unit in Qatar.

Air Liquide’s Board of Directors, chaired by Benoît Potier, Chairman and CEO, met on July 30, 2010, and reviewed the Group’s financial statements at June 30, 2010.

Business in the first half was characterised by a solid progression of both sales and profits, as well as a recovery in growth projects. Group revenue reached €6,516 million at June 30, 2010, representing an increase of +9.7% versus H1 2009 reported sales. In Gas and Services, total sales stood at €5,695 million, up +13.4% on a reported basis, and up +9.5% on a comparable basis. After returning to growth in Q1 2010, all businesses and geographies continued to improve in Q2, with a continuing contrast between emerging economies (up +30% vs. H1 2009) and mature economies where volumes are gradually returning to their pre-crisis levels (up +6% vs. H1 2009).

Operating income recurring increased +22% to €1,084 million. The operating margin reached 16.6%, up +160 basis points vs. H1 2009, due to an increase in customer volume demand and the effectiveness of operational control measures. Net profit (Group share) was €676 million, up +13.3% versus H1 2009.

Operating cash flow was up +16.7% at €1,266 million, and net debt was stable compared to June 30, 2009. The number of investment projects has increased significantly since the beginning of the year. As a result, the portfolio of opportunities reached €4.7 billion in June.

Benoît Potier, Chairman and CEO of the Air Liquide Group, stated:

“In the first half of 2010, the Group posted a solid progression in sales and profits compared to both 2009 and pre-crisis level of 2008. This sound performance is due not only to continually increasing customer demand but also to the Group’s ability to adapt to a new environment thanks to its ALMA program.

Growth projects are picking up at a moderate pace in mature economies, but at a sustained pace in emerging economies. The Group’s portfolio of investments opportunities is now back to its pre-crisis level.

In this context, and based on current trends, we maintain our objective of continuous growth in net profit in 2010, in line with our long-term performance.”

H1 2010 key figures

* On a comparable basis: excluding impact of currency and natural gas

** Adjusted to reflect the distribution of one bonus share for every 15 existing shares in May 2010

Limited external audit reviews have been completed in relation to the consolidated interim financial statements and an unqualified opinion is in the process of being issued by the statutory auditors.