Air Liquide increases its net profit by 11.6% and doubles its operating margin target

At a time when the French economy is struggling, some manufacturers are managing to do well. This is the case of Air Liquide, which has just published excellent results for the 2023 financial year, more particularly in the area of ​​profitability. “In two years, we have practically achieved the ambition of increasing the margin that we had set for 2025 as part of our Advance strategic plan,” said François Jackow, the general director of Air Liquide, in a press release. As a result, we are announcing today that we are doubling our initial ambition. Concretely, the group was aiming for an increase of 160 basis points in its operating margin (i.e. 1.6%). He now estimates that it should increase by 320 basis points (or 3.2%), which represents a considerable ambition.

In terms of 2023 accounts, however, Air Liquide shows a decline in its turnover of -7.8%, to 27.6 billion euros. But this decline can be explained exclusively by the fall in energy prices over the period. However, the group has contracts where it simply passes on changes in these prices to its customers, without any impact on its margins. Without this element, its activity increased by 3.7%. Above all, its operating profit exceeds 5 billion euros, up 4.2% (and 11.4% like-for-like). The operating margin thus stands at 18.4%.

This dynamism can be explained by the desire of the group's customers to accelerate the path to decarbonization. And Air Liquide offers a range of solutions to help them do so. Hydrogen is therefore an excellent vector to achieve this. And big contracts are - finally - won in this area. Thanks to an agreement with TotalEnergies, Air Liquide has launched the construction of a giant electrolyser in Normandy, which represents an investment of 400 million euros. Carbon capture represents another important lever. A memorandum of understanding was, for example, signed with the cement manufacturer Holcim to use Air Liquide technology in the field in order to decarbonize a cement plant in Belgium. And most of the traditional activities of the French industrialist are also well oriented. It thus benefits from the proliferation of new semiconductor factories, for which it is the main gas supplier in the world. 200 million dollars will thus be invested in Taiwan and South Korea in new production centers.

Overall, again excluding the energy effect, the group increases its operating margin by 0.8 points in 2023, and by 1.5 points over two years. The objective of the Advance strategic plan, set for 2025, was for an increase of 1.6 points. It is therefore almost reached two years early. And the levers for growth and margin improvement are still there. “The portfolio of projects under execution is historically high at 4.4 billion euros and investment decisions have reached a record level of 4.3 billion euros in 2023,” highlights Air Liquide. Enough to justify the doubling of the objective of increasing the operating margin within two years.