The half year benefited from strong growth in markets globally well oriented. Group revenue totaled 10,162 million euros in the 1st half of 2018, up +5.8% on a comparable basis, and close to the high end of the NEOS target range. This was supported by high Gas & Services sales, an improvement in Engineering & Construction and the strong growth of Global Markets & Technologies. The currency impact was strongly negative over the half year at -6.8%, mainly due to the appreciation of the euro against the US dollar, but eased slightly during the 2nd quarter. The energy impact was slightly positive at +0.4%. The sale of the Airgas Refrigerants business at the end of 2017 led to a significant scope impact of -0.7%. Published Group revenue variation was therefore down -1.3% over the half year. Gas & Services revenue reached 9,769 million euros during the 1st half, up +5.0% on a comparable basis, with a strong contribution from developing economies (+12.3%).
All business lines contributed to growth over the half year. In Industrial Merchant, sales growth was robust (+4.3%), supported in particular by the manufacturing sector, metal fabrication and construction. The price impact stood at Air Liquide – H1 2018 Performance PAGE 3/25 +1.9%. Large Industries (+5.2%) benefited from the ramp-up of units, including a major unit in South Africa. Air gases volumes were up markedly, driven by the chemicals sector, whereas hydrogen volumes were penalized by a higher number of customer maintenance turnarounds compared to last year. In Healthcare, growth was dynamic (+5.9%) in particular in Home Healthcare where the number of diabetic patients and patients treated for sleep apnea continued to increase. Demand was also very dynamic in Electronics, with revenue up +6.7%, driven by Carrier Gases, new molecules and exceptionally high Equipment & Installation sales during the 2nd quarter.
Engineering & Construction revenue totaled 180 million euros, up +29.8% compared to the 1st half of 2017, benefiting from the gradual improvement in order intake seen in 2017.
Global Markets & Technologies sales were up +29.2% at 213 million euros. These were particularly dynamic in the biogas sector, which benefited from the start-up of a major landfill biogas purification unit in the United States and three small farm waste biogas purification units in France and in the United Kingdom.
Efficiencies amounted to 174 million euros during the first six months of the year, ahead of the annual target of over 300 million euros from the NEOS program. They include a contribution of 14 million euros from Airgas for the first time.
Airgas synergies represented a cumulated 260 million US dollars since the acquisition of Airgas in May 2016 and 45 million US dollars over the first six months of 2018. The 300 million US dollar target will be reached in H1 2019, i.e., 12 months earlier than initially forecasted.
The Group’s operating income recurring (OIR) reached 1,617 million euros in the 1st half of 2018, down -2.3% as published, but up +4.8% excluding the currency impact and +6.2% on a comparable basis over the 1st half of 2017. The operating margin (OIR to revenue) stood at 15.9% and 16.0% excluding the energy impact, which corresponds to a slight decrease of -10 basis points compared with the 1st half of 2017. This was mainly due to the negative operating income recurring generated by Engineering & Construction still under loaded. Moreover, the disposal of the Airgas Refrigerants business had a dilutive impact on the margin; excluding the disposal, the operating margin would have been stable.
The Gas & Services operating margin stood at 17.8%, up + 30 basis points excluding energy compared with the 1 st half 2017.
Net profit (Group share) amounted to 1,040 million euros in the 1st half of 2018, an increase of +12.1% or more than +20% excluding the currency impact.
Net cash after changes in working capital requirement (and other items) was 1,770 million euros, an increase of +11.1% compared with the 1st half of 2017, largely exceeding the change in sales (published change of -1.3%). Net indebtedness at June 30, 2018 reached 14,217 million euros.
The 12-month portfolio of opportunities totaled 2.5 billion euros at the end of June 2018, up 200 million euros compared with March 2018. Industrial and financial investment decisions reached 1.4 billion euros in the 1st half of 2018, up more than +30% compared with the 1st half of 2017. Net capital expenditure totaled 1,133 million euros and represented 11.1% of sales, in line with the NEOS strategic plan.
The Air Liquide Board of Directors met on July 27, 2018. During this meeting, the Board reviewed the consolidated financial statements for the first half ending June 30, 2018. Limited review procedures were completed with respect to the consolidated interim financial statements, and an unqualified review report is in the process of being issued by the statutory auditors
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