Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Air Liquide SA (AIQUF, Financial) achieved a record year in 2024 with a significant operating margin improvement of over 100 basis points.
- The company reported a strong backlog of EUR 4.2 billion in signed growth investment projects, indicating secured future growth.
- Air Liquide SA (AIQUF) successfully reduced CO2 emissions by 11% below 2020 levels, showcasing its commitment to sustainability.
- The company proposed a dividend per share increase of 13.7% to EUR 3.3, reflecting a strong commitment to shareholder value.
- Investment decisions reached a record high of EUR 4.4 billion, with major projects signed across the USA, Asia, and Europe, indicating robust future growth opportunities.
Negative Points
- Despite overall growth, the Global Market Technologies segment saw a decline of 2.5%, impacted by divestitures in aerospace and defense.
- The company faced challenges in Europe with soft volumes in the Industrial Merchant segment, partly due to the divestiture of activities in 12 African countries.
- There is uncertainty in the US regarding clean energy projects, with investment decisions likely delayed until the second half of 2025 due to policy uncertainties.
- The restructuring costs amounted to over EUR 200 million, reflecting significant expenses related to the company's transformation initiatives.
- The company anticipates continued soft volumes in the EMEA region for 2025, requiring active pricing strategies to maintain resilience.
Q & A Highlights
Q: Can you provide insights on the future margin improvement plans beyond 2026?
A: Francois Jackow, CEO, stated that while it's early to comment on specifics beyond 2026, the structural transformations underway will continue to deliver margin improvements. The commitment to margin enhancement is ongoing, and the transformations will have effects in 2025, 2026, and beyond.
Q: How are customer conversations around clean energy projects progressing, especially with policy uncertainties in the US and Europe?
A: Adam Peters, CEO of Air Liquide North America, noted that while developments remain high, investment decisions are likely delayed until the second half of the year due to policy clarity needs. Emilie Mouren-Renouard, VP of Europe Industries, added that in Europe, project development is active, but some final investment decisions are delayed due to regulatory uncertainties.
Q: What is the impact of industrial shutdowns in Europe on Air Liquide's long-term contracts?
A: Francois Jackow explained that Air Liquide's model ensures that the economic lifetime of assets matches contract durations, minimizing exposure at contract end. Many assets are shared across networks, providing resilience against individual customer shutdowns. While some industries may decline, new opportunities, such as in the cement industry, are emerging.
Q: Can you clarify the recognition of investment decisions and project backlogs, particularly for large projects like those with Exxon and Total?
A: Jerome Pelletan, CFO, clarified that only growth projects are included in the backlog. Projects are recognized when all conditions are met, and currently, only portions of large projects like Exxon are included, reflecting a cautious approach.
Q: How does Air Liquide plan to achieve its margin targets, and what role do volume recoveries play?
A: Francois Jackow stated that margin improvement commitments are independent of volume growth. However, a gradual recovery is expected, with electronics showing signs of improvement and solid pricing in the US. Incentive changes are being implemented across the organization to align with strategic priorities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
