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Third quarter 2020: Marked recovery in sales across all regions and all business lines, 2020 Guidance confirmed

Paris, France,
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Commenting on the 3rd quarter of 2020, Benoît Potier, Chairman and CEO of the Air Liquide Group, said:

“This 3rd quarter saw a marked recovery in sales. Compared with the 2nd quarter of 2020, which was impacted by the pandemic, all business lines and all regions improved. Group revenue reached 5 billion euros, -0.9% on a comparable basis (-8.7% as published, reflecting the negative currency, energy price and significant scope impacts).

Gas & Services, which represent 96% of Group sales, were almost flat, with contrasted situations. Momentum in Healthcare and Electronics remained particularly good; Large Industries sales recovered, whereas Industrial Merchant, which showed a marked sequential improvement, still remained at a level below 2019. By region, sales in Europe and Asia were stronger than in the 3rd quarter of 2019 on a comparable basis, and the Americas improved compared with the 2nd quarter of 2020. 

Global Markets & Technologies also saw a return to growth, whereas Engineering & Construction sales demonstrated progressive improvement, compared to previous quarters.

The Group continued its drive to improve its operating margin, delivering 311 million euros of efficiencies over the first nine months, in line with its annual target of more than 400 million euros, and the additional cost containment plan continued to deliver.

The continued improvement in performance translated into cash flow from operating activities which reached nearly 24% of sales. The investment cycle remains well oriented and the 12-month portfolio of investment opportunities, which is refocused on growth markets, stands at a high level. Investment decisions, which ensure future growth, were significant at 2.1 billion euros at the end of September, almost one third relating to the energy transition.

In a context of limited local lockdowns and progressive recovery until the end of 2020, Air Liquide is confident in its ability to further increase its operating margin and to deliver net profit[1] close to preceding year level, at constant exchange rates.”

Group revenue for the 3rd quarter of 2020 totaled 4,980 million euros. The business model has proven its resilience in recent months in a challenging public health context. Business has been picking up across all regions with sales at -0.9% on a comparable basis in the 3rd quarter of 2020, near 2019 levels. China saw the most dynamic level of recovery, with 3rd quarter 2020 sales up markedly, whereas the situation was more contrasted in the rest of the Asia-Pacific region. Activity is picking up in Europe, and posted slight growth compared with 2019. Signs of a more gradual recovery can be seen in North America and business remains strong in South America, in particular for Large Industries and Healthcare. Consolidated Engineering & Construction sales (-24.4%) reflected the priority allocation of resources to internal projects. Global Markets & Technologies returned to double-digit growth, with sales up markedly by +11.4% during the 3rd quarter. Due to the materially negative impacts of currency (-3.7%), significant scope (-2.6%) and energy (-1.5%), Group revenue as published was down -8.7%. 

Gas & Services revenue for the 3rd quarter of 2020 reached 4,777 million euros, slightly down -0.9% on a comparable basis. The markedly negative impacts of currency (-3.8%), significant scope (-2.7%) and energy (-1.5%) affected Gas & Services revenue as published, which was down -8.9%. Significant scope impact includes the disposal of schülke in Healthcare and the reduction of the Group’s participation in a reseller in Japan during the 3rd quarter 2020, and the disposal of Fujian Shenyuan in September 2019.

  • Gas & Services revenue in the Americas totaled 1,916 million euros in the 3rd quarter, marking a decline of -3.3% on a comparable basis. North America saw a marked improvement in sales compared with the 2nd quarter, but these remained down compared with 2019. Latin America posted sales growth. Large Industries revenue was up over the quarter (+2.1%). Industrial Merchant saw a strong sequential rebound, but remained affected by the public health crisis and lockdown measures with revenue down -6.8%. Electronics posted strong growth of +6.6%. Healthcare remains fully committed to the fight against the pandemic and posted sales growth of +8.0%.
  • Revenue in Europe totaled 1,615 million euros over the 3rd quarter, posting a comparable growth of +0.5%. Industrial activities saw a significant recovery across the region, although volumes remained below pre-public health crisis levels. Large Industries sales (-3.4%) grew sequentially compared with the 2nd quarter of 2020. In Industrial Merchant (-4.8%, of which -1.9% from minor divestments), cylinder gas sales returned to a level near that of the 3rd quarter of 2019. Healthcare revenue was up +9.5% during the 3rd quarter, driven by sales of ventilators at cost price that remained exceptionally high due to the pandemic.
  • Revenue in Asia-Pacific reached 1,101 million euros, up +1.6% on a comparable basis. In China, momentum was strong across all industrial business lines, growing at +7.6%. The recovery was slower in the rest of the region, impacted by the public health crisis. Large Industries (+3.0%) was driven by demand in China and the ramp-up of a unit in South Korea. Industrial Merchant (-4.0%) was still sluggish, but recovered compared with the 2nd quarter. Electronics (+6.3%) remained very strong with growth exceeding +10% excluding Equipment & Installation sales.
  • Middle East and Africa revenue stood at 145 million euros, stable (+0.0%) on a comparable basis. In Industrial Merchant, the Middle East and India improved clearly compared with the 2nd quarter, with the recovery more contrasted in Africa. Large Industries sales were up slightly compared with the 3rd quarter of 2019, notably in South Africa and Saudi Arabia. Healthcare, which continues to be committed to the fight against COVID-19, posted strong growth across the region.

Healthcare remains highly invested in the fight against Covid-19 and posted a comparable sales growth of +8.4%. Sales growth in Electronics was also very solid at +5.9% and +7.3% excluding Equipment & Installation, with a sharp increase in Advanced Materials and Carrier Gases sales. Large Industries sales were stable, +0.2% compared with 3rd quarter 2019, driven notably by developing economies and in particular, by the recovery in China. Industrial Merchant posted a decline of -5.8%, sustained pricing impacts of +2.6%, growth in China, the eastern part of Europe and South America were unable to offset the slowdown from the public health crisis which continues to be strongly felt, notably in the sales of hardgoods in the United States.

Consolidated Engineering & Construction revenue reached 60 million euros in the 3rd quarter, with sales to third-party customers remaining sluggish due to the public health crisis. Resources were mainly allocated to internal projects in Large Industries and Electronics.

Global Markets & Technologies revenue was 143 million euros and saw a return to very dynamic growth momentum of +11.4%, as production capacity was no longer constrained by the public health crisis. Equipment sales were up markedly, in particular membrane purification systems. The biogas business remained strong, notably in Europe where biomethane sales for transport were up, and in the United States.

Efficiencies amounted to 311 million euros over the first nine months of the year, in line with the annual objective fixed at more than 400 million euros. Since the start of the performance improvement program in 2017, 1.4 billion euros of cumulated efficiencies have been generated. Moreover, exceptional cost reductions under the public health crisis response plan continued but are not, due to their nature, sustainable over the long term.

Cash flow from operating activities amounted to 3,648 million euros at the end of September 2020, which corresponds to 23.9% of sales, a marked improvement of +240 basis points compared with the 3rd quarter of 2019[2] The net debt-to-equity ratio, adjusted for the seasonal effect of the dividend payment, reached 58,3% representing a significant decrease compared with December 31, 2019 (64.0%).

Industrial investment decisions reached 685 million euros during the 3rd quarter and close to 2 billion euros since the beginning of 2020 despite the public health crisis. Development was very active in Large Industries, notably with the signature of a takeover in Kazakhstan and a new Air Separation Unit in Poland.

The 12-month portfolio of investment opportunities continued to improve and reached 3.0 billion euros. This excludes the on-going takeover of the 16 Air Separation Units in South Africa. The change in the portfolio confirms the Group’s future growth outlook.

The additional contribution to sales of unit start-ups and ramp-ups totaled 53 million euros over the 3rd quarter of 2020, and 133 million euros over the first nine months of the year. This should reach 180 million euros for 2020 as a whole, at the high end of the estimate range communicated previously. For 2021, the estimated additional contribution to sales is reforecast upwards in the range of 320 to 350 million euros despite the postponement of some start-ups and after taking into account the sales contribution from the 16 Air Separation Units that are currently being taken over in South Africa.


  1. ^ 2020 recurring net profit: excluding exceptional and significant items that have no impact on the operating income recurring.
  2. ^ Compared with restated 3rd quarter 2019 following changes in 2019 annual financial statements: financial costs before taxes linked to IFRS 16 arereclassified in other financial expenses whereas they were included in net finance costs on 30 september 2019. A distinction is now made between other non-cash items under which the adjustment of this cost is recognized as well as income and expenses under IAS 19 and IFRS 2 and other cash items