Air Liquide’s annual profit beats forecasts

French industrial gases firm Air Liquide on Tuesday doubled its 2025 margin target after posting better-than-expected annual operating profit, sending its shares to an all-time high in late morning trading.

The supplier of gases such as oxygen, nitrogen and hydrogen to factories and hospitals now targets a 320 basis points (bp) operating margin by 2025, up 100% from the 160bp it had expected two years ago as part of its Advance strategic plan.

“Have we been too conservative? Absolutely not,” CEO François Jackow said on a call with journalists, adding that the previous targets were based on historical models.

The company did not provide a precise forecast in operating margin for 2024.

Jackow said the group’s performance came from offering “value-adding” pricing solutions and optimising operational performance.

Air Liquide hiked prices by 8% in its industrial merchants business last year.

The stock jumped 5.8% by 11.01am GMT, hitting a record high of €182.7.

Recurring operating income rose 11.4% on a comparable basis to €5.07bn ($5.48bn) in 2023, above the €5.02bn expected by analysts polled by Vara Research.

Air Liquide recorded 5.1% revenue growth in its Gas & Services in North America in 2023, which accounts for 96% of its business.

The French company was chosen in October as a partner for six out of seven planned clean hydrogen hubs by the US department of energy, which will allocate $7bn for the projects within a bipartisan infrastructure law.

“These are long-term projects, which will take place over the next five or 10 years,” Jackow noted, adding that, in the event of a change in the US administration, Air Liquide is “looking at different scenarios, different timetables for the development of these activities”.

Reuters