Air Liquide Current Operating Income Rises 7.4% in First Half
The industrial gas company saw comparable sales growth of 9.2% as activity recovered from the health crisis.
Air Liquide reported current operating income of 1,948 million euros for the first half of 2021, an increase of 7.4%. On a comparable basis, current operating income rose 17.1%, a rate the company said was significantly higher than the comparable sales growth of 9.2% for the period.
Group sales reached 10,846 million euros. The company attributed the published sales increase of 5.6% to a 4.0% energy effect, which partially offset negative impacts from exchange rates of -4.8% and significant perimeter changes of -2.8%. The Gaz & Services segment contributed 10,350 million euros to total sales, representing a comparable increase of 8.0%.
Operating margin reached 18.0%. Excluding energy effects, the company reported an improvement of 100 basis points compared to the first half of 2020. The Gaz & Services segment recorded an operating margin of 20.0%, which the company said was an improvement of 120 basis points excluding energy effects. Air Liquide noted that the published margin progression was limited by a strong rise in energy prices that are contractually recharged to customers.
Growth was supported by the Marchés Globaux & Technologies activity, which reached sales of 327 million euros, a comparable increase of 34.9%. The company said this was driven by high-technology value-added equipment sales and biogas activity. In the Gaz & Services segment, prices in the Industriel Marchand activity rose 1.9% during the first half.
Efficiency gains totaled 206 million euros, a rise of 3.5%. These gains represented a 2.8% saving on the cost base, compared to 2.5% in the first half of 2020. Industrial efficiencies contributed more than 40% of this total. The company said it continued to deploy digital tools, including remote operation centers for Grande Industrie production units and delivery tour optimization tools for Industriel Marchand.
Net debt stood at 12,013 million euros as of June 30, 2021. This figure represents an increase of 1,404 million euros compared to December 31, 2020, following the payment of dividends in May and the acquisition of 16 air gas production units from Sasol in South Africa. The company reported that the net debt to equity ratio, adjusted for dividend seasonality, fell to 56.1% from 64.5% at the end of June 2020.
Net income for the group rose 14.9% to more than 1 billion euros. The company said it is confident in its ability to increase its operating margin again and achieve growth in recurring net income at a constant exchange rate during the second half of 2021.
Air Liquide identified 3 billion euros in investment opportunities over the next 12 months, with nearly half of these projects related to the energy transition. The company currently maintains a project portfolio under execution valued at 3.1 billion euros.