Air Liquide – 2013 1st Quarter revenue

  Air Liquide – 2013 1st Quarter revenue

1^st quarter 2013:
Growth investments continue
Good resilience of the Gas & Services activity

Business Wire

PARIS -- April 24, 2013

Regulatory News:

Air Liquide (Paris:AI)

1^st quarter 2013 highlights

  *New contracts signed in the United States and in Rotterdam for investments
    in excess of € 240M
  *Acquisitions in Healthcare: NordicInfu Care in home healthcare
    (Scandinavia) and BiotechMarine in specialty ingredients (France)
  *Electronics: new contracts for flat panel displays in China
  *Innovation: investment in Hydrexia for hydrogen storage; biofuel research
    contract in France

1^st quarter 2013 revenue                      Variation Q1 13 / Q1 12
                                                  Excluding
                           Q1 2012    Q1 2013    impact of     Underlying
                                                  currency and   activity*
                                                  natural gas
Group revenue               3,779 M€   3,698 M€   +0.2%
of which Gas & Services    3,443 M€  3,406 M€  +1.4%         +4.9%
Investment decisions       527 M€    710 M€                 
                                                                 

* excluding impact of currency, natural gas, customer settlements in Q1 2012
and calendar effects

Group revenue for the 1^st quarter 2013 reached 3,698 million euros, down
slightly (-2.1%) compared with Q1 2012, but stable (+0.2%) excluding currency
and natural gas impacts.

Gas & Services sales reached 3,406million euros. In a contrasted economic
environment, the underlying activity was up +4.9%, driven by the pursuit of
development initiatives in growing markets. Gas & Services sales rose on a
comparable basis +9% in the developing economies.

Large Industries benefited from higher hydrogen demand for chemical plants and
refineries in the United States and in China, and from start-ups and ramp-ups
of new plants in Eastern Europe. Industrial Merchant activity was up slightly
(+1%) on a comparable basis, while Electronics saw a recovery in equipment and
installation sales in Japan. Healthcare showed strong growth in all zones,
reaching +12% at the global level and +13% in Europe, including the LVL
Médical and Gasmedi acquisitions.

Efficiency gains reached 59 million euros for the quarter, in line with the
annual objective of more than 250million euros. The Group is pursuing its
efficiency efforts in its operations as well as by continuously adapting its
structures.

Commenting on the 1^st quarter 2013, Benoît Potier, Chairman and CEO of the
AirLiquide Group, stated:

“In an economic environment that remains contrasted, the 1^st quarter saw the
pursuit of growth investments and an increase in our underlying growth in Gas
& Services by almost 5%. Boosted by the impact of acquisitions, the Healthcare
activity is characterized by sustained growth of +12%.

The newly signed contracts, the planned commissioning of 50 units between 2013
and 2014, and the gradual ramp-up of plants that have started up in the past
three years strengthen the Group’s confidence in its ability to pursue growth
over the medium term.

Barring a degradation of the environment, Air Liquide is confident in its
ability to deliver another year of net profit growth in 2013.”

Upcoming events

Annual General Meeting:
Tuesday, May 7, 2013

Dividend ex-date*:
Thursday, May 16, 2013

Dividend payment date*:
Wednesday, May 22, 2013

2013 1^st half results:
Tuesday, July 30, 2013

* subject to the necessary approvals at the Combined Shareholders' Meeting on
May 7, 2013

                              www.airliquide.com

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2013 first quarter revenue

  *Growth investment decisions continue
  *Good resilience of the G&S activity

In 1^st quarter 2013, in a context which has remained difficult, at least in
Western Europe and Japan, our year on year activity level continues to grow
and our developments in fast growing markets are delivering.

Published growth year on year is hampered by negative currency translation
impact, lower price of natural gas, fewer working days in the period and by a
high comparison basis linked to last year customer settlements. However the
underlying trend remains positive.

The resilience of the portfolio of investment opportunities and solid
signatures both in the gas business and in engineering illustrate the
medium-term confidence of customers.

As a result of ongoing efficiency and strict cash control the main financial
indicators were preserved during the quarter.

                                                  Q1
                                                  2013/2012
Revenue                               Q1          change            Q1
                  Q1 2012  Q1      2013/2012                 2013/2012
(in millions of              2013     published   Excl.             Underlying
euros)                                change      currencies        trend
                                                  and natural
                                                  gas
Gas and Services  3,443    3,406   - 1.1%     + 1.4%            + 4.9%
Engineering and   178      147     - 17.4%    -16.8%
Technology
Other activities  158      145     - 8.0%     - 7.5%
TOTAL REVENUE     3,779    3,698   - 2.1%     + 0.2%
                                                                    

Revenue analysis

Group

1^st quarter 2013 Group revenue totaled 3,698 million euros, down – 2.1% as
published. Adjusted for the significant currency and natural gas impact sales
are up +0.2%.

Gas and Services

Unless mentioned otherwise, all the changes in G&S revenue described below are
based on comparable data excluding the impact of currency, natural gas and
significant scope. For 1^st quarter 2013, they are also adjusted for some
significant 2012 customer settlements. These adjustments impact Large
Industries in North America and Asia-Pacific.

In 1^st quarter 2013, Gas and Services published revenue declined -1.1%,
impacted by a -1.9% negative currency impact and a -0.6% negative natural gas
impact. The year on year comparison is also penalized by the exceptionals of
last year, namely two particularly significant Large Industries customer
settlements that were recorded in the 1^st quarter for 1.5%. Finally it is
also important to highlight that 1^st quarter 2013 had two working days less
than 1^st quarter 2012, which impacts in particular the Industrial Merchant
business line and reduces Gas and Services sales by approximately 2% for the
period.

Excluding these various impacts, the analysis of the underlying trend in
activity remains positive, showing a + 4.9% growth.

Gas & Services Q1 2013 revenue growth analysis

Globally, Gas and Services growth is still impacted by the environment, now
for the 6^th quarter in a row. However start-ups, ramp-ups and bolt-on
acquisitions are contributing +1.8% to growth, in line with expectations.
Growth remains very strong in developing economies, at +9% on a comparable
basis as well as in the Healthcare business line, at +12% including the
contribution of the 2012 major acquisitions in Europe, LVL Médical and
Gasmedi.

Revenue                                      Q1 2013/2012   Q1 2013/2012
                        Q1 2012  Q1 2013  published     comparable
(In millions of euros)                       change         change ^(a)
Europe                  1,747    1,769    +1.2%         +0.2%
Americas                772      766      -0.8%         +3.2% ^(b)
Asia-Pacific            840      780      -7.2%         + 1.0% ^(b)
Middle East and Africa  84       91       +8.9%         +16.8%
Gas and Services        3,443    3,406    -1.1%         +1.5%
Large Industries        1,262    1,225    -3.0%         +3.4% ^(b)
Industrial Merchant     1,281    1,254    -2.1%         +0.5%
Healthcare              598      659      +10.1%        +3.4%
Electronics             302      268      -11.3%        -6.3%


(a) Comparable growth, excluding the impact of currency, natural gas and
significant scope

(b) Also adjusted for the impact of 2012 customer settlements.

Europe

Europe revenue, at 1,769million euros, is up +0.2%, reflecting significant
volume growth in developing economies, solid underlying growth in demand in
healthcare while the demand for gases remained soft in advanced economies. A
reduction in number of working days during the quarter weighed on comparable
growth, particularly in Healthcare and Industrial Merchant.

Europe Gas and Services revenue

• Large Industries reported +1.0% growth, marked by continued weakness in
metals demand. Demand in the Chemicals and Refining sectors remained solid,
with a pick-up at the end of the quarter as the rather longer than usual
outages were completed. Revenue grew strongly in Central and Eastern Europe,
with the contribution of a site takeover in Ukraine and a ramp-up in Russia.

• Industrial Merchant sales were down slightly by –1.0%, with ongoing
double-digit growth in sales in developing economies supported by small
bolt-on acquisitions and increasing capacity utilization nearly compensating
for weak sales in advanced economies. The price effect remained positive at
+0.5%.

• Healthcare growth was more modest than usual at +2.1%, due to the lower
number of days during the quarter. However, including the LVL Médical and
Gasmedi acquisitions in France and Spain, revenue was up +12.5%. Home
Healthcare continued to report significant growth in volumes and revenues,
driven by the continuous increase in number of patients treated and the
successful integration of the acquired companies in France, in Spain and in
Sweden offsetting price reductions. Medical gases more moderate volume
increases were offset by weak pricing and lower equipment sales. The Hygiene
activity maintained a steady growth rate at +7%.

• Electronics revenue declined by –16.5% compared to 1^st quarter 2012.
Equipment sales were very limited due to an absence of investment projects in
the sector. Gases sales were down slightly, in the absence of any new
contracts, in line with lower industry production rates and with the
progressive transfer of solar production capacity to Asia.

Americas

Gas and Services revenue in the Americas totaled 766million euros, up +3.2%.
Momentum remained strong in South America while North America sales were
impacted by several seasonal customer turnarounds and by a very significant
reduction in Electronics equipment sales.

Americas Gas and Services Revenue

• Large Industries reported solid +7.0% sales growth. After longer than
normal customer outages, Gulf coast chemicals and refining demand picked up
strongly at the end of March. Canadian oxygen demand was also solid due to
stronger demand from the steel sector. Developing economies continued to post
robust sales growth in both air gases and hydrogen.

• Industrial Merchant achieved +4.5% growth, due to sustained demand across
the Americas. Strong pricing, bolt-on acquisitions and growth in South America
more than offset the impact of seasonal sales to the fracking industry in
North America.

• Healthcare revenue increased by +8.1%, driven by significant growth in the
number of Home healthcare patients in Latin America and a new hospital
contract in Brazil. Activity and pricing were more difficult in the USA.

• Electronics sales were down, to -24.6%, as last year sales were boosted by
a large Equipment and Installation contract. In the absence of any new
contracts and weak customer production levels, gas sales were also down.

Asia-Pacific

Asia-Pacific revenue rose by +1.0% to 780 million euros. Situations were very
contrasted with a continued slow down in Japan in particular in Industrial
Merchant, solid growth in China despite Large Industries turnarounds and a
soft recovery in Electronics, mostly visible in Equipment and Installation
sales at this stage.

Asia-Pacific Gas and Services Revenue

• Despite the absence of any start-ups in the region during the 1^st quarter
and customer outages, Large Industries sales rose +5.1%, boosted by continued
growth in China.

• The trend in Industrial Merchant deteriorated year on year, down - 3.9%.
This was due to a significant slowdown in sales in Japan and soft demand
throughout the region during the period which was impacted by a lower number
of days. However specialty gases are growing and pricing effect was positive
at +1.1%.

• Electronics sales were up +2.2%. While gas sales were more or less stable
across the region, equipment sales rose off a low base, providing a possible
indicator of a recovery in the cycle in the second half of the year.

• Healthcare revenue increased by +5.3%, driven by strong progress in South
Korea and a return to growth in Japan after many months of restructuring.

Middle East and Africa

Middle East and Africa revenue amounted to 91million euros, up +16.8%. This 
performance reflects strong underlying industrial demand in virtually all
countries in the region, particularly in South Africa and Saudi Arabia, and
benefits from the development of the healthcare activities off a very low base
in Northern Africa and the Middle East.

Engineering and Technology

In order to reflect the technological evolution of the Engineering business
unit, into more and more sophisticated engineering projects, the activities
have been renamed Engineering and Technology. While the revenues have always
included the technology sales of the Group, the published order intake was
limited to the traditional gas and energy projects. From the beginning of
2013, the technology order-intake will be included. In 2012, total technology
order-intake was 238 million euros relative to the Engineering and
Construction order-intake of 1,704 million euros.

Engineering & Technology revenue totaled 147 million euros, down –17.4%
compared to 1^st quarter 2012. This decline in revenues is due to the large
number of projects being in their early phase. The higher levels of order
intake since the beginning of 2012 will start to feed into revenues more
significantly in the last quarters of the year.

At 448 million euros, the quarterly order intake was solid, including
average-sized projects in every region, with a larger number of Group projects
signed during the period.

Other activities

Revenue                                     Q1 2013/2012   Q1 2013/2012
                       Q1 2012  Q1 2013  published     comparable
(in million of euros)                       change         change ^(a)
Welding                111      101      - 9.3%        - 9.2%
Diving                 47       44       - 5.0%        - 3.6%
TOTAL OTHERS           158      145      - 8.0%        - 7.5%


(a) Comparable : excluding currency impact

Other Activities revenue in 1st quarter 2013 declined by –7.5% to 145million
euros.

Welding revenue was down - 9.2% in the 1^st quarter, due to a continued
weakness in European and export demand.

Diving (Aqua Lung) reported a reduction in sales, linked to lower professional
demand while leisure activity remained strong.

Highlights of the 2013 first quarter

Industrial investment decisions

Air Liquide USA acquired Progressive Resources Inc., a supplier of liquid
nitrogen and cryogenic storage for oil and gas customers. PRI has five
customer service centres in four states of the central United States. The
Group also inaugurated a new nitrogen liquefaction facility in Texas.

In California, the Group signed a contract with Calgren Renewable Fuels for
the recovery and purification of carbon dioxide through which it will provide
services to the food-and-beverage and manufacturing industries in the region.

In the port of Rotterdam, the second-largest chemical and petrochemical basin
in Europe, Air Liquide signed a contract with Huntsman. This long-term supply
contract will double the production capacity of Air Liquide in carbon monoxide
in this basin. The Group is preparing to invest 65 million euros for this unit
to be built by the Group’s Engineering & Technology division; the
commissioning of the plant is scheduled for early 2015.

As part of a European project to develop the use of vehicles running on
hydrogen, Air Liquide will design and install three new high-capacity filling
stations in the cities of Bremen in Germany, Birmingham in the United Kingdom
and Brussels in Belgium, by 2014. Over a three-year period,
90hydrogen-fuelled vehicles will be made available to drivers in order to
collect concrete data on how the vehicles are used.

Expansion in Healthcare

The Group is expanding its presence in the Nordic countries and in the field
of Home Healthcare for non-respiratory diseases with the acquisition of
NordicInfu Care, a major player in Home Healthcare in Northern Europe. This
acquisition will enable Air Liquide to enter new countries by taking care of
4,600new patients in Sweden, Norway, Denmark and Finland. By providing both
the medication and the medical equipment needed, NordicInfu Care enables
patients with chronic diseases to be treated at home, thereby giving them
greater autonomy.

Through its subsidiary Seppic, Air Liquide acquired BiotechMarine, a French
company that specializes in the design of bio-based cosmetic ingredients made
from algae. BiotechMarine brings the Group complementary expertise in research
and innovation using marine biotechnology and plant cell culture.

Innovation in electronics in Asia

Air Liquide signed two contracts with the largest manufacturer of
advanced-technology flat panel displays in China, BOE Technology. Two new
cutting-edge plants, located in Inner Mongolia and in Anhui Province, will be
supplied with ultra-pure carrier gases. The two new fabs are scheduled to be
commissioned in late 2013 and early 2014, respectively. This long-term
partnership is the largest investment made by Air Liquide to date for a client
in this sector in China.

300 million euros bond issue

Under its Euro Medium Term Note (EMTN) programme, the Group issued 300 million
euros of bonds with a 10 and a half year maturity and a coupon of 2.375%. This
transaction enabled Air Liquide to extend the average maturity of existing
debt, while benefitting from favourable market conditions. The bond is rated
“A” by Standard & Poor’s.

Investment cycle

Portfolio of opportunities

While the 12-month portfolio of opportunities remained stable at 4.0billion
euros at the end of March 2013, the composition has evolved, with a constant
flow of new projects coming in, compensating for those that have been signed,
awarded to competition or delayed. The portfolio includes several very large
projects.

Nearly two thirds of the projects in the 12-month portfolio are still located
in developing economies, with a growing focus in Eastern Europe and some very
large projects in China. The portfolio also includes 11 site takeovers
representing more than 25% of the value of the overall opportunities.

Investment decisions

Industrial and financial investment decisions, which are key to future growth,
amounted to 710 million euros in the quarter, still amongst the highest levels
of the last three years. Industrial decisions accounted for 93% of the amount.
They remain well aligned with the major trends of our markets.

Large Industries projects are mostly in the chemical sector. In Industrial
Merchant, there are several CO[2] capacity investments to serve the food and
beverage industry. Developments were also being pursued in Home Healthcare
with a rather significant acquisition in the Nordic countries and in high tech
electronics with new contracts in developing Asia.

Capital expenditure

Net capital expenditure, including transactions with minority interests, stood
at 531million euros for the quarter, including 53 million euros for
acquisitions.

Start-ups

Six new units were started-up in 1^st quarter, the two main ones being ASU
take-overs in Mexico and Ukraine.

Operating performance

Group efficiency gains for the quarter reached 59million euros, in line both
with previous 1^st quarters and the new objective of more than 250 million
euros each year. This performance is the result of the contribution of many
projects all around the Group in purchasing, logistics and energy efficiency.
The structural adaptation plans continue to be strengthened in countries where
growth is more modest.

Cash from operations after change in working capital up +10% year on year was
solid for the first three months of the year reaching 464 million euros and
providing the financing for the 478 million euros of industrial capital
expenditure. The group’s financial structure remains solid.

Outlook

In an economic environment that remains contrasted, the 1^st quarter saw the
pursuit of growth investments and an increase in underlying growth in Gas &
Services by almost 5%. Boosted by the impact of acquisitions, the Healthcare
activity is characterized by sustained growth of +12%.

The newly signed contracts, the planned commissioning of 50 units between 2013
and 2014, and the gradual ramp-up of plants that have started up in the past
three years strengthen the Group’s confidence in its ability to pursue growth
over the medium term.

Barring a degradation of the environment, the Group maintains its full year
guidance to deliver net profit growth in 2013. Nevertheless, the two halves
will be contrasted. Whereas the impact of new additional taxes and IFRS
pension adjustments will be spread over the year, the accruals related to
adaptation plans will mostly affect the 1^st half, while the positive impact
of these plans will only start to deliver in the 2^nd half.

Appendix

Impacts of currency, natural gas, significant scope and customer settlements

In addition to the comparison of published figures, 2013 1^st Quarter
financial information is given excluding the impact of currencies, natural gas
price fluctuations, significant scope and where relevant customer settlements.

Since industrial and medical gases are rarely exported, the impact of currency
fluctuations on activity levels and results is limited to euro translation
impacts with respect to the financial statements of subsidiaries located
outside the Euro-zone. Fluctuations in natural gas prices are generally passed
on to our customers through indexed pricing clauses.

Consolidated 2013 1^st quarter revenue includes the following:

In                   Q1                                          Q1 13/12                   Q1 13/12
millions  Revenue  13/12   Currency  Natural  Significant  comparable  Customer     adjusted
of         Q1 2013   Change              gas       scope         Change       Settlements   Change
euros                ^ (a)                                       ^(a)                       ^(b)
Group     3,698    -2.1%   -67       -21      +49          -1.1%       -50          +0.2%
Gas &     3,406    -1.1%   -66       -21      +49          +0.0%       -50          +1.5%
Services
                                                                                   

(a) excluding the impact of currency, natural gas and significant scope.

(b) excluding the impact of currency, natural gas, significant scope and 2012
customer settlements.

For the Group,

  *The currency impact was – 1.7%.
  *The impact of lower natural gas prices was - 0.6%.
  *The significant scope impact was + 1.3%.
  *The customer settlements impact accounted for - 1.3%.

For Gas and Services,

  *The currency impact was - 1.9%.
  *The impact of lower natural gas prices was - 0.6%.
  *The significant scope impact was + 1.4%.
  *The customer settlements impact accounted for - 1.5%.

Contact:

Air Liquide
Corporate Communications
Corinne Estrade-Bordry, + 33 (0)1 40 62 51 31
Garance Bertrand, + 33 (0)1 40 62 59 62
or
Investor Relations
Virginia Jeanson, +33 (0)1 40 62 57 37
Annie Fournier, +33 (0)1 40 62 57 18
 
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