Paris, France-based Air Liquide reported its 2017 first half fiscal results on Friday, led by considerable year-over-year increases in sales and profit that were helped by the group's 2016 acquisition of Airgas — No. 7 on Industrial Distribution's Big 50 List.
Air Liquide posted Q2 sales of approximately $6 billion, an increase of 19.5 percent year-over-year on a reported basis, and up 2 percent on a comparable basis. Sales increased 6.6 percent from Q1 on a reported basis. In the Americas, sales of $1.6 billion increased 54.9 percent year-over-year on a reported basis and increased 2.9 percent on a comparable basis.
Air Liquide's Q2 Gas & Services sales of $5.8 billion increased 21.2 percent year-over-year on a reported basis and increased 2.7 percent on a comparable basis. Engineered & Construction sales of $109.3 million decreased 28.8 percent on a reported basis and decreased 29.1 percent on a comparable basis.
By Gas & Services business segment in Q2:
- Large Industries sales of $1.53 billion increased 10.3 percent year-over-year on a reported basis and 1.8 percent on a comparable basis
- Industrial Merchant sales of $2.79 billion increased 37.5 percent year-over-year on a reported basis and 3.1 percent on a comparable basis
- Healthcare sales of $988 million increased 11.1 percent year-over-year on a reported basis and 3.5 percent on a comparable basis
- Electronics sales of $469 million increased 2.4 percent year-over-year on a reported basis and 1.2 percent on a comparable basis
For the first half of 2017, Air Liquide's total group profit of $1.09 billion increased 14.5 percent year-over-year on a reported basis.
"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," Air Liquide chairman and CEO Benoît Potier said. "Sales benefited from the end of the Airgas consolidation effect and positive currency and energy impacts."
● 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 second quarter, particularly in China, where double-digit growth was recorded, and in Japan. In developing economies, revenue 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 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 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 and Egypt benefited from the start-up of a new unit.
● Electronics 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 United States 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 revenue, up +4.5%, continued its development, driven by the steady growth of Home Healthcare, Hygiene, and Specialty 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 second quarter and a weak contribution from complementary acquisitions. However, Home Healthcare remained dynamic there, particularly in the field of diabetes. The development of Hygiene and Specialty 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
Air Liquide posted Q1 sales of $5.63 billion, up 38.5 percent year-over-year (+1.5 percent comparable). The vast majority of the increase was due to a 42.3 percent increase in its Gas & Services sales (+2.8 percent comparable) to $5.44 billion. The company's Engineering & Construction business sales of $57.3 million decreased 57.4 percent (-58.4 percent comparable), while Global Markets & Technologies sales of $77 million increased 18.8 percent (+19.2 percent comparable).
Air Liquide's Industrial Merchant unit — which accounted for 47 percent of its Gas & Services sales — posted a year-over-year sales increase of more than 90 percent (+2.6 percent comparable). The group noted that it was the unit's first comparable sales growth quarter since Q4 2014.