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Air Liquide – 2013 3rd quarter revenue



  Air Liquide – 2013 3rd quarter revenue

Business Wire

PARIS -- October 24, 2013

Regulatory News:

Air Liquide (Paris:AI)

3^rd quarter 2013: Continued activity improvement

2013 objective maintained

3^rd quarter 2013 highlights

  * Major investments: new agreements signed with BASF in the Antwerp
    industrial basin, Altos Hornos de Mexico in northern Mexico, and with an
    energy operator client in the United States.
  * Completion of the acquisition of Voltaix in the Electronics sector in the
    US.
  * Technological innovation: participation in the creation of a vast network
    of hydrogen filling stations in Germany, as part of the H2 Mobility
    initiative.

Upcoming events

Salon Actionaria:
November 22-23, 2013

2013 annual results:
February 18, 2014

                                         
3^rd quarter 2013 revenue               Variation Q3 13 / Q3 12
                                        published     adjusted*
Group revenue               € 3,765 M   -1.0%         +5.1%
of which Gas & Services     € 3,444 M   -1.3%         +5.1%

* adjusted for currency and natural gas impacts

Group revenue for the third quarter of 2013 was € 3,765 million, up +5.1%
compared with the same period in 2012, after adjusting for currency impacts,
which were significant this quarter, and for natural gas impacts. This
confirms the continued improvement of our activity since the beginning of
2013.

Gas & Services sales reached € 3,444 million, also rising +5.1%, adjusted for
currency and natural gas impacts. Growth was observed across all businesses
and geographies, and  Gas & Services sales for industry in developing
economies grew at a comparable rate close to +9%.

The Americas turned in a good performance, due in particular to the dynamism
of Large Industries and the resilience of Industrial Merchant. Industrial
business in Europe continues to benefit from start-ups and ramp-ups of new
units in Russia and Ukraine. Asia Pacific revenue was driven by an improvement
in sales in Japan, particularly in Electronics. Healthcare revenue for the
quarter showed a significant rise of +13.2%, adjusted for currency impacts, 
attributable to higher volumes and the acquisition of both LVL Médical and
Gasmedi.

Engineering & Technology (E&T) revenue rose +13.2%, adjusted for currency
impacts, boosted by equipment sales to third-party clients.

Efficiency gains through September 2013 reached € 209 million, ahead of the
annual objective of more than € 250 million, and contributed to the Group’s
operating performance.

Benoît Potier, Chairman and CEO of the Air Liquide Group, stated:

“Our performance this quarter is in line with the positive trend observed
since the beginning of the year, driven by our Healthcare activity, the
dynamism in the Americas and Eastern Europe, as well as an improvement in
Japan and in Electronics.

Our operating performance is strong and the Group continues the realignment
required to improve its competitiveness and efficiency.

The level of investment remains sustained and mostly focused on growth
projects. Our 12-month portfolio of opportunities remains at a high level
which attests to the confidence of our customers 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.”

Air Liquide is the world leader in gases for industry, health and the
environment, and is present in 80 countries with close to 50,000 employees.
Oxygen, nitrogen, hydrogen and rare gases have been at the core of Air
Liquide’s activities since its creation in 1902. Using these molecules, Air
Liquide continuously reinvents its business, anticipating the needs of current
and future markets. The Group innovates for the good of society while
delivering growth and consistent performance.

Innovative technologies that curb polluting emissions, lower industry’s energy
use, recover and reuse natural resources or develop the energies of tomorrow,
such as hydrogen, biofuels or photovoltaic energy… Oxygen for hospitals, home
healthcare, fighting nosocomial infections… Air Liquide combines many products
and technologies to develop valuable applications and services not only for
its customers but also for society.

A partner for the long term, Air Liquide relies on employee commitment,
customer trust and shareholder support to pursue its vision of sustainable,
competitive growth. The diversity of Air Liquide’s teams, businesses, markets
and geographic presence provides a solid and sustainable base for its
development and strengthens its ability to push back its own limits, conquer
new territories and build its future.

Air Liquide explores the best that air can offer to preserve life, staying
true to its Corporate Social Responsibility and sustainable development
approach. In 2012, the Group’s revenues amounted to € 15.3 billion of which
82% were generated outside France. Air Liquide is listed on the Paris Euronext
stock exchange (compartment A) and is a member of the CAC 40 and Dow Jones
Euro Stoxx 50 indexes.

                              www.airliquide.com

                    Follow us on Twitter @AirLiquideGroup

2013 third quarter revenue

  * Robust underlying trend continued
  * Operational indicators in line
  * Focus on growth projects

Underlying revenue growth, excluding currency and natural gas, in the quarter
was in line with previous quarters at +5.1%, reflecting positive signals in
Advanced economies, pursued momentum in Developing economies, early signs of
recovery in Electronics and strong Healthcare volumes. Group revenue for the
3^rd quarter 2013 reached € 3,765 million, down -1.0% on a published basis,
impacted by the weakness of most of the currencies relative to the euro.

Operating indicators were in line year to date as a result of ongoing
efficiency projects, integration of bolt-on acquisitions, strong operating
cash flow and progressive execution of the realignment programs.

The Group continues to sign new projects, a good sign for future growth. These
investment decisions illustrate the ongoing trend towards outsourcing around
the world, new incremental volume demand in some of the major industrial
basins, the existence of significant energy solution projects, as well as
numerous bolt-on acquisition opportunities.

                                                     Q3            YTD
Revenue                                              2013/2012     2013/2012
                  Q3 2012   Q3 2013   Q3 2013/2012   excl.         excl.
(in millions of                       change         currency      currency
euros)                                               and natural   and natural
                                                     gas           gas
Gas and           3,490     3,444     -1.3 %         + 5.1%        +4.0%
Services
Engineering and   167       184       +10.5 %        + 13.2%       + 6.0%
Technology
Other             146       137       -6.0 %         - 3.9%        -6.1%
activities
TOTAL REVENUE     3,803     3,765     -1.0%          +5.1 %        + 3.7%
                                                                  

Revenue analysis

Unless otherwise stated, all the changes in revenue described below are based
on data, excluding currency and natural gas impacts.

Group

Group revenue was 3,765 million euros in the 3^rd quarter 2013, down -1.0% as
published. Adjusted for a significant currency impact of -5.5%, due to the
recent strength of the euro, and for -0.6% declining natural gas prices,
underlying Group revenue was up +5.1%. On a comparable basis, also excluding
the contribution of the LVL Médical and Gasmedi acquisitions which were
consolidated from September and October 2012 respectively, growth came out at
+4.0% for the quarter.

Gas and Services

In 3^rd quarter 2013, Gas and Services revenue totaled 3,444 million euros,
down -1.3% as published. The translational currency impact was particularly
significant this quarter at -5.8% due to the weakness of most currencies
relative to the euro, including a very substantial decline in the yen and
weakness in all the Developing economy currencies. Natural gas pass-through
was also negative at -0.6%. Excluding currency and natural gas impacts,
underlying revenue was up +5.1%, in line with the performance of previous
quarters. The contribution of Home Healthcare acquisitions amounted to +1.2%,
slightly lower than previous quarters as LVL Médical was already consolidated
in September 2012. On a comparable basis, Gas and Services sales rose +3.9%
compared to the same period in 2012.

The 3^rd quarter activity index, corresponding to revenue, excluding currency
and natural gas impacts, weighted by the number of days per period, remained
robust. This reflected positive signals in Advanced economies, pursued
momentum in developing economies and growth in all business lines.

Gas and Services quarterly activity index

Industrial activity trends remain correlated to industrial production in each
of the geographies, and sales were further strengthened in Developing
countries by ongoing investment in newly outsourced capacities. As a result,
in the 3^rd quarter, growth in Developing Europe reached +32% and in South
America +18%. Growth was more subdued at +4% in the Middle-East and Africa,
penalized by political events, and in Asia with virtually no contribution from
start-ups or ramp-ups. The Gas and Services revenue for industries from the
Developing economies now accounts for 27% of the total. In Advanced economies,
North American sales were particularly strong up +8%. For the first time since
2011, there is a return to growth in Japan, due to an improvement in
Electronics and Industrial Merchant while Advanced Europe remains subdued at
-2% against a relatively high comparable base in 3^rd quarter 2012.

Healthcare has grown by +13% during the period, excluding currency impacts.
This is a result of continued growth in demand, particularly in Home
Healthcare in all regions and the contribution from the two significant
acquisitions last year in France and Spain. Efforts are pursued in Developing
economies as well, at + 27% average growth, with particularly strong
performance in Eastern Europe and South America.

Gas and Services quarterly growth analysis

The base business improvement continued in the 3^rd quarter. Start-ups,
ramp-ups, site takeovers and bolt-on acquisitions contributed +3% to the
growth in Gas and Services sales during the quarter, and +4.2% including the
significant scope.

Revenue                                      Q3 2013/2012   Q3 2013/2012
                         Q3 2012   Q3 2013   change         excl. currency
(In millions of euros)                                      and natural gas
Europe                   1,728     1,745     +1.0%          +3.8%
Americas                 793       813       +2.5%          +9.1%
Asia-Pacific             873       796       -8.7%          +4.0%
Middle East and Africa   96        90        -6.9%          +5.3%
Gas and Services         3,490     3,444     -1.3%          +5.1%
Large Industries         1,253     1,218     -2.7%          +2.7%
Industrial Merchant      1,322     1,274     -3.7%          +3.8%
Healthcare               607       667       +9.7%          +13.2%
Electronics              308       285       -7.5%          +4.2%
                                                           

Europe

3^rd Quarter 2013 European revenue totaled 1,745 million euros, up +3.8%
excluding currency and natural gas, and up +1.5% on a comparable basis.
Substantial growth in Eastern Europe continued due to the combination of unit
ramp-ups, site takeovers and underlying industrial demand growth, while there
are some positive signals in Western Europe. Healthcare demand continues to
grow, and volume growth in particular in Home Healthcare is compensating
tariff reductions.

Gas and Services Europe revenue

• Large Industries was down -0.3%. Demand for refining and chemicals was slow
during the quarter. As a result, hydrogen volumes were slightly lower,
particularly in Germany. Ramp-ups in Russia and Ukraine have continued to
boost oxygen volumes in Eastern Europe, with sales up +41% during the quarter.

• Industrial Merchant sales were up +0.8%. Advanced economies demand has
stabilized. In Developing markets strong demand, new capacities and bolt-on
acquisitions continued to boost growth. In the context of a lower cost
inflation environment, pricing remained positive in the region at +0.5%.

• Healthcare grew +14.1%, or +5.4% excluding the contribution from the LVL
Médical and Gasmedi acquisitions. The number of Home Healthcare patients
continues to grow boosted by bolt-on acquisitions in Poland, Germany and
Scandinavia, providing the synergies to more than offset the constant tariff
pressure. Modest medical gas volume growth also compensated price reductions.
The Hygiene activities, driven by the German subsidiary Schülke & Mayr
continued to grow.

• Electronics activity in Europe now represents only 2% of sales. Activity,
down -5.8% in the quarter, is still affected by the progressive transfer of
the industry to Asia.

Americas

Gas and Services 3^rd quarter revenue in the Americas totaled 813 million
euros, up +9.1%. This performance reflects solid demand in all business
segments, including a pick-up in equipment sales in Electronics in the US,
continued strong demand in South America and ramp-up of activities in Mexico.

Americas Gas and Services Revenue

• Large Industries reported +9.0% growth with strength across the region, due
to strong petro-chemicals demand in the Gulf Coast, a site takeover in the
Mississippi basin and a ramp-up in Mexico. Refining sector demand was stable
and cogeneration plants benefited from higher electricity sale prices. Demand
in South America was strong across the region.

• Industrial Merchant growth remained particularly solid at +8.8%, combining
good volume growth in both the North, boosted in particular by oil services,
and the South, where the Group is gaining market share. Pricing remained
positive at +3.8%.

• Healthcare revenue grew +9.0%, driven by strong growth in Home Healthcare in
Latin America, supported by bolt-on acquisitions and new contracts.

• Electronics revenue increased by +11.9%, showing double-digit growth for the
first time since the beginning of 2012. The contribution of Voltaix, acquired
mid-September 2013, remains marginal over the period.

Asia-Pacific

Asia-Pacific revenue was up +4.0%, at 796 million euros. For the first time
since the tsunami in 2011, sales were up in Japan, in both Electronics and
Industrial Merchant, reflecting in particular a wider improvement across the
region in the Electronics investment cycle. Large Industries growth in China
was impacted this quarter by several unplanned unit shutdowns.

Asia-Pacific Gas and Services Revenue

  * A +3.9% increase  in Large Industries sales reflects the impact of two
    shutdowns in China and the limited contribution from start-ups in the last
    months in the region, and in particular in China.
  * Industrial Merchant revenue was up by +2.9% over the quarter. Activity in
    Japan has stabilized with slight positive growth for the first time since
    2011. Growth was stable quarter-on-quarter in the rest of the region.
  * Electronics revenue increased by +4.2% over the quarter. This is a result
    of new carrier gas contracts in China and some Equipment and Installation
    sales in Japan reflecting the beginning of a new investment cycle. ESG
    sales remained stable.
  * Healthcare revenue grew by +12.0%, boosted by bolt-on acquisitions in
    particular in Australia, where the majority of the activity is, and South
    Korea.

Middle-East and Africa

Middle East and Africa revenue amounted to 90 million euros, up +5.3%. Growth
slowed down, due to ongoing unrest in Egypt and some sourcing issues. The
Yanbu project is advancing well, and achieved mechanical completion on time
and on budget.

Engineering and Technologies

Engineering and Technologies revenue reached to 184 million euros, up +13.2%
compared to the 3rd quarter 2012 bringing the year to date increase to +6.0%.
In line with the investment decisions in the quarter, 3^rd quarter order
intake at 274 million euros, progressed solidly. Order intake year to date is
strong at 1,238 million euros, and is split 58% for the Group and 42% for
third party sales.

Other activities

Revenue                                      Q3 2013/2012   Q3 2013/2012
                         Q3 2012   Q3 2013   change         change excluding
(in millions of euros)                                      currency
Welding                  103       94        -8.8%          -8.5%
Diving                   43        43        +0.9%          +6.5%
TOTAL                    146       137       -6.0%          -3.9%
                                                           

Third quarter revenue for Other activities decreased –6.0% to reach
137 million euros.

The Welding activity continues to be weak in Western Europe. The
implementation of realignment plans has now started and will bring the cost
base down to more appropriately reflect current activity levels. The +6.5%
growth in Diving (Aqualung) sales reflects solid demand and a bolt-on
acquisition.

2013 Q3 Highlights

Development based on proprietary advanced technologies

Air Liquide recently started up the world’s largest helium purification and
liquefaction unit in Qatar. This new liquefier, combined with an existing unit
on the site, will make Qatar the world’s second largest producer of helium.
Built by the Group’s Engineering & Technologies (E&T) teams, thanks to their
advanced patented technologies, this unit is operated by RasGas. Air Liquide
has positioned itself as one of the main players in the global market of this
scarce resource by contracting to buy 50% of the helium volumes produced on
the site.

In the Electronics World Business Line, the Group has strengthened its
position in advanced electronics materials globally by finalizing its
acquisition of Voltaix Inc., a leader in strategic materials production. The
acquisition complements the Group’s existing leadership in new material
development through its ALOHA^TM brand, providing growth and cost synergies
through scale. These advanced molecules and precursors are used for the
production of semiconductor devices and advanced solar cells.

Together with its «H[2] Mobility» partners, Air Liquide has signed a
term-sheet agreement to implement a major action plan for the construction of
a 400-unit hydrogen filling station network in Germany. The Group is also a
partner in comparable initiatives in several European countries as well as in
Japan.

Investments in Large Industries

Air Liquide signed a long term contract with BASF to supply carbon monoxide to
a unit based in the Antwerp basin, the largest chemical and petro-chemical
basin in Europe. This unit, which represents an investment of 50 million
euros, is scheduled to be up and running in 1st quarter 2015 and will double
the Group’s carbon monoxide production capacity in the basin.

In Mexico, Air Liquide’s rapid development in the north of the country is
linked to two new projects with Altas Hornos de Mexico ; the takeover of an
existing Air Separation Unit (ASU) and the construction of a new unit. With
this investment, the Group will have spent 200 million euros in Mexico since
2011 to establish its strong position in the north of the country.

Ongoing European expansion in Home Healthcare

The Group has reinforced its Home Healthcare presence in Europe with
acquisitions of HELP! and Ventamed in Poland, both specialized in home
respiratory and ventilation healthcare. With these acquisitions, Air Liquide
becomes one of the key players in the home healthcare market in Poland.

The Group has also announced its plans to sell its 66% stake in Laboratoires
Anios, specialized in disinfectant and antiseptic products, in order to
refocus the development of its hygiene business on Schülke & Mayr, a
wholly-owned subsidiary.

2013 Q3 Investment cycle

Portfolio of opportunities

The 12-month portfolio of opportunities is stable at 3.8 billion euros at the
end of the quarter, compared to the end of June despite two significant
projects having been switched to in-house solutions. Project review activity
remains solid and new opportunities have been added to the portfolio during
the 3^rd quarter.

The portfolio is currently more diversified by size, both by geography and by
client industry than it has been for many years. Two thirds of the projects in
the 12-month portfolio are still located in Developing economies, spread
widely across Eastern Europe, Latin America, China, the Middle-East and
Africa. The number of site takeovers in the portfolio remains stable, with 12
projects representing more than 20% of the value of the overall opportunities.

Investment decisions

Industrial and financial investment decisions, which is to say Group
undertakings in terms of future investments, amounted to 0.7 billion euros
over the quarter, bringing the total up to 2.1 billion euros year to date,
including 0.4 billion euros of acquisitions.

Exceptionally this quarter, more than a half of the investment decisions were
in the USA including the takeover of a nitrogen unit in the Mississippi region
and the acquisition of Voltaix for Electronics.

Capital expenditure

Net capital expenditure, including transactions with minority interests, stood
at 1,935 million euros year to date, including 1,570 million euros of
industrial decisions, reflecting the high level of industrial investment
decisions in the previous 24 months and 365 million euros of acquisitions.

Start-ups

A further six start-ups occurred in the 3^rd quarter 2013, after nine in the
first half. To date, 11 of these were in Developing economies, in all regions
of the world. Half are Large Industries units, including four site takeovers,
and the other half, are new CO[2] and Developing market liquid capacities for
Industrial Merchant and Electronics.

The Group maintains its estimate of 50 start-ups for the two-year period 2013
– 2014.

Operating performance

Group efficiency gains stood at 71 million euros over the quarter, cumulating
to 209 million euros since the start of the year, ahead of the annual target
of over 250 million euros. Realignment plans have now been announced and are
starting to be implemented in the regions where growth is more modest, with
the intention of reducing the cost base in line with a lower level of base
business. Most of the cost of these plans have been accrued in the first half
of the year.

The combination of lower inflation in most countries around the world and
ongoing pricing in Industrial Merchant is also helping to preserve the Group’s
operating performance.

Cash from operations before change in working capital has risen by +4.5%, and
by +7.4% excluding currency impact, for the first nine months of the year, to
2.2 billion euros, financing net investments of 1.9 billion euros, including
365 million euros of acquisitions. The Group’s financial structure remains
solid.

Outlook

The Group’s 3^rd quarter performance is in line with the positive trend
observed since the beginning of the year, and is driven by the Healthcare
activity, the dynamism in the Americas and Eastern Europe, as well as an
improvement in Japan and in Electronics.

The operating performance is strong and the Group continues the realignment
required to improve its competitiveness and efficiency.

The level of investment remains sustained and mostly focused on growth
projects. Our 12-month portfolio of opportunities remains at a high level
which attests to the confidence of the Group’s customers 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.

Appendices

Currency, natural gas and significant scope impacts

In addition to the comparison of published figures, financial information is
given excluding currency, the impact of natural gas price fluctuations and
significant scope effect.

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 3^rd quarter revenue includes the following:

                                                                    Q3
In         Q3 2013   Q3                     Natural   Significant   2013/2012
millions   Revenue   2013/2012   Currency   gas       scope         change
of euros             change                                         comparable
                                                                    ^(a)
Group      3,765     -1.0%       (210)      (23)      +41           +4.0%
Gas &      3,444     -1.3%       (202)      (23)      +41           +3.9%
Services

(a) excluding currency, natural gas and significant scope impacts.

For the Group,

  * The currency impact was -5.5%.
  * The impact of lower natural gas prices was -0.6%.
  * The significant scope impact was +1.1%.

For Gas and Services,

  * The currency impact was -5.8%.
  * The impact of lower natural gas prices was -0.6%.
  * The significant scope impact was +1.2%.

Gas and services comparable growth analysis

Revenue                                      Q3 2013/2012   Q3 2013/2012
                         Q3 2012   Q3 2013   change         change
(In millions of euros)                                      comparable ^(a)
Europe                   1,728     1,745     +1.0%          +1.5%
Americas                 793       813       +2.5%          +9.1%
Asia-Pacific             873       796       -8.7%          +4.0%
Middle-East and Africa   96        90        -6.9%          +5.3%
Gas and Services         3,490     3,444     -1.3%          +3.9%
Large Industries         1,253     1,218     -2.7%          +2.7%
Industrial Merchant      1,322     1,274     -3.7%          +3.8%
Healthcare               607       667       +9.7%          +6.5%
Electronics              308       285       -7.5%          +4.2%

(a) excluding currency, natural gas and significant scope impacts.

YTD 2013 revenue

Consolidated year-to-date 2013 revenue includes the following:

                                                                    YTD
In         YTD       YTD                    Natural   Significant   2013/2012
millions   2013      2013/2012   Currency   gas       scope         Change
of euros   Revenue   change                                         comparable
                                                                    ^(a)
Group      11,327    -0.1%       (378)      (51)      +146          +2.4%
Gas &      10,329    +0.0%       (365)      (51)      +146          +2.6%
Services

(a) excluding currency, natural gas and significant scope impacts.

Revenue per business line
                                                  
In millions of euros         YTD 2012   YTD 2013   YTD 2013/2012 Change
                                                   published   comparable^(a)
Gas & Services               10,327     10,329     +0.0%       +2.6%
Large Industries             3,719      3,680      -1.1%       +2.2%
Industrial Merchant          3,886      3,812      -1.9%       +2.7%
Healthcare                   1,804      2,010      +11.4%      +5.6%
Electronics                  918        827        -9.9%       -2.0%
Engineering & Technologies   532        556        +4.5%       +6.0%
Other activities             476        442        -7.2%       -6.1%
Welding                      335        301        -10.0%      -9.9%
Diving                       141        141        -0.6%       +2.7%
Group revenue                11,335     11,327     -0.1%       +2.4%

(a)comparable: excl. currency, natural gas and significant scope

G&S revenue by geography
                                              
In millions of euros     YTD 2012   YTD 2013   YTD 2013/2012 change
                                               published   comparable^(a)
Europe                   5,199      5,291      +1.8%       +1.3%
Americas                 2,311      2,404      +4.0%       +5.7%
Asia-Pacific             2,547      2,358      -7.4%       +1.5%
Middle-East and Africa   270        276        +2.4%       +12.5%
Gas & Services revenue   10,327     10,329     +0.0%       +2.6%

(a)comparable: excl. currency, natural gas and significant scope

Contact:

Corporate Communications
Anette Rey
+ 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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