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Air Liquide Cuts 2015 Revenue Goal as Rebound Is Delayed

Dec. 11 (Bloomberg) -- Air Liquide SA cut its 2015 sales-growth target and plans to invest 10 billion euros ($14 billion) from 2016 to 2020 as it taps demand for industrial gases in health care, energy and electronics.

Annual revenue increases will average 5 percent to 7 percent in 2011 to 2015, adjusted for currency effects, the Paris-based company said in a statement today. From 2016 to 2020, sales will rise 6 percent to 9 percent a year, it said.

“Small customers in Western Europe and Japan have been affected by the crisis,” Chief Executive Officer Benoit Potier told investors in Paris. “We’ll have to seek growth not by geographies, but by market types,” because the spread in pace of expansion between emerging and mature economies is narrowing.

Potier, who is cutting jobs in France, Germany and Italy to adapt to Europe’s economic woes, raised his cost-savings target in February for the five years through 2015 by 30 percent to 1.3 billion euros. He reiterated the goal today.

Three years ago, Potier predicted average annual revenue growth of 8 percent to 10 percent through 2015, along with a return on capital employed of 12 percent to 13 percent. A 12 billion-euro investment program for the period is now “already mostly committed,” the company said today.

More Spread

Air Liquide predicts a return on capital employed of 11 percent to 13 percent in the 2016-2020 period “because the growth cycle is ‘‘a bit more spread’’ over time as some clients such as Saudi Arabian Oil Co. have delayed starting already completed plants, the CEO said.

The stock rose for the time in 10 days based on closing prices and was trading 0.9 percent higher at 98.39 euros 1 p.m. in Paris.

The French company, which is restructuring its welding unit, will keep improving margins and profit as it has ‘‘quite a few efficiency gains ahead,’’ Potier said. Air Liquide, which is selling its stake in antiseptic products maker Anios, will be ‘‘a bit more active’’ in its portfolio management, and may sell assets that don’t have ‘‘satisfactory potential.’’

It will continue to expand in home care, where it already provides 1 million customers with respiratory therapies and treatment for diseases such as diabetes, and plans health-care acquisitions, Potier said.

Dividend Ratio

‘‘Among gas makers, market shares are such that a large move between leading players is hardly conceivable with current competition rules,’’ the CEO said. The company wants to keep a ‘‘good’’ credit rating and a dividend payout ratio of as much as 50 percent, he said.

Beyond tapping trends for global access to energy and natural resources, rising demand for health care and a growing global middle class that will lift demand for industrial gases, Air Liquide may get a boost towards 2020 from ‘‘the energy transition,’’ the digitalization of health data, and the use of hydrogen to power vehicles or store energy, Potier said.

‘‘Once one of these three boosters lift-off, that’s at least 1 billion euros in extra revenue for Air Liquide,’’ he said.

To contact the reporter on this story: Francois de Beaupuy in Paris at

To contact the editor responsible for this story: Simon Thiel at

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