Air Liquide is a world leader in gases, technologies and services for Industry and Health. The сompany is present in 80 countries with approximately 66,000 employees and serves more than 3.6 million customers and patients. Oxygen, nitrogen and hydrogen are essential small molecules for life, matter and energy.
2018 was a particularly strong year for the сompany: sales growth reached EUR 21 billion and net profit rose to EUR 2.1 billion. Gas & Services activities accounted for 96% of the Group’s revenue. From a geographic perspective, growth was also seen across the board, especially for the Americas and Asia Pacific, particularly China. Cash flow grew and contributed to a significant reduction in the debt ratio, to 69%. ROCE reached 8.3% in 2018 compared to 7.7% at the end of 2017.
According to the Press Release and Management Report on Financial Results 2018, group revenue for 2018 stood at EUR 21,011 million and increased by 3 .3%, compared to EUR 20,349 million in 2017.
The Group’s operating income reached EUR 3,449 million in 2018 compared to EUR 3,364 million in 2017 and represented an increase of 2.5%. The operating margin amounted to 16.4% in 2018 compared to 16.5% in 2017. Net profit amounted to EUR 2,113 million in 2018 and increased by 4.2% compared to the net profit for 2017, which excluded exceptional items and the impact of the US tax reform that had no impact on cash flow.
Cash flow from operating activities totalled EUR 4,138 million and stood at 19.7% of the сompany´s sales. It allowed the financing of net industrial capital expenditures, which reached EUR 2.2 billion, and the decrease of the debt-to-equity ratio, down from 80% at the end of 2017 to 68.8% at the end of 2018.
Gas & Services revenue reached EUR 20,107 million in 2018 compared to EUR 19,642 million and grew by 2.4%, increasing sequentially.
Geographically, Gas & Services Revenue in the Americas totaled EUR 7,982 million in 2018 and decreased by 2.1% from EUR 8,115 million in 2017. Large Industry sales improved by 5.4% in both air gases and hydrogen. Industrial Merchant sales posted strong growth (+4.6%) with a high price impact. Healthcare revenue continued to improve markedly (+8.2%). Electronics posted revenue growth of +6.7% over the year.
Gas & Services Revenue in Europe totalled EUR 7,111 million and improved by 5.0% over the year. Large Industries sales improved by 1.9%, in particular in air gases. Industrial Merchant grew by 3.2% and Healthcare continued its steady growth and increased by 4.8%, mainly driven by organic sales growth.
Gas & Services Revenue in the Asia Pacific zone totalled EUR 4,359 million in 2018 and grew by 6.8%. Large Industries showed higher sales of 3.5%, benefitting from start-ups at the end of 2018. Industrial Merchant increased by 7.0%, especially in China. Revenue from Electronics posted record growth of +17.1%, with strong gas sales and exceptionally high Equipment & Installation sales.
Gas & Services Revenue in the Middle East and Africa zone amounted to EUR 655 million and increased by 3.2% over the year. In Large Industries, 2018 sales benefited from the start-up in December 2017 of the largest Air Separation Unit in the world in South Africa. Business activity remained high in Egypt.
Engineering & Construction revenue totalled EUR 430 million in 2018 compared to EUR 335 million in 2017 and increased by 28.4% over the year. However, the Operating loss for Engineering & Construction totalled EUR 4 million in 2018, penalized by a business volume which remained insufficient. Nevertheless, the gradual improvement in the business contributed to the return of a positive operating income recurring in the 2nd half of 2018, which should continue to improve gradually to reach a margin of between 5% and 10% in the medium term.
Global Markets & Technologies sales grew by 27.3% from EUR 372 million in 2017 to EUR 474 million in 2018, the biogas activity being the main contributor to this growth. Operating income recurring for Global Markets & Technologies reached 50 million euros with an operating margin of 10.5% for the year.
The additional Airgas synergies in 2018 amounted to US$ 76 million and have reached an accumulated US$ 290 million since the acquisition.
Research & Development expenses and Corporate costs stood at EUR 277 million, a +14.2% increase compared with 2017, due to an increase in research and the ramping-up of the Group’s digital transformation.
In 2018 Air Liquide signed new long-term contracts for the construction of hydrogen production units in South Korea and Benelux, and two Airgas units in Russia; supplied oxygen for a strategic customer from the group´s network in the United States, and entered the Kazakhstan market. The company developed the biomethane market with the commissioning of five new production units in the United States, France and United Kingdom and took new investment decisions in Northern Europe and in the United States.
For many years now, Air Liquide has been committed to a sustained growth, to limit its own CO2 emissions as well as those of its customers. In 2018 the company presented its ambitious climate objectives, in particular the 30% reduction objective in its carbon intensity between 2015 and 2025, with a global approach that includes its assets, its customers, and ecosystems.