Air Liquide Earnings: Sales Climb 7%, With Growth Across All Regions

Narrow-moat-rated Air Liquide AI started 2023 with a strong first quarter, with growth in all regions and business lines except for large industries, though the latter showed signs of sequential recovery. We’ve increased our fair value estimate to EUR 145 from EUR 140, driven by our slightly more optimistic revenue growth projections as well as time value of money.

On a comparable basis, Air Liquide increased its first-quarter revenue by 6.2% from the same period last year, with growth across all regions: 9.2% in the Americas, 5.5% in Europe, 4.8% in Asia-Pacific, and 4.6% in the Middle East and Africa. Industrial merchant sales grew 14.8%, benefiting from 12.9% higher pricing. Electronics maintained its strong momentum, posting 10.4% year-over-year growth, fueled by specialty materials sales and the ramp-up of carrier gas units. Healthcare sales delivered 7.7% growth, driven by strong home healthcare sales and higher medical gas prices. Lastly, large industries sales were down 3.6% year over year due to soft demand in Europe. We are encouraged by the sales growth acceleration in healthcare and sequential recovery in large industries, as in the latter sales were down 10% year over year in the fourth quarter.

During the first quarter, Air Liquide announced an industrial-scale ammonia cracking pilot plant in Antwerp, Belgium, planned to be operational in 2024. Furthermore, the industrial gas firm also announced a joint venture with TotalEnergies to develop a network of over 100 hydrogen refueling stations for trucks in Europe. We are encouraged by these project announcements and continue to believe that Air Liquide is poised to benefit from new investment opportunities in blue and green hydrogen.