CSR: Air Liquide added to Dow Jones Sustainability Europe Index – 13/01/2023, 10:04

(AOF) – Air Liquide has been recognized again in 2022 by several non-financial rating agencies for its performance on environmental, social and governance (ESG) criteria. Following progress in terms of sustainable development, the French group is now included in the Dow Jones Sustainability Europe Index by S&P Global.

Air Liquide is also ranked 4th out of 54 major global companies in the chemical sector according to the ChemScore tool of the NGO Chemsec.

The group was awarded an “A-” rating by the NGO CDP (Carbon Disclosure Project), well above the sector average, in two categories: climate change and water security.

Air Liquide also became the first company to obtain approval for CO2 emission reduction targets for 2035 through the Science-Based Targets (SBTi) initiative, the fruit of efforts by CDP, the United Nations Global Compact, WWF and World Resources. Institute (WRI).

For the ninth year in a row, Air Liquide is one of the signatories of the United Nations Global Compact. the group has been included in the FTSE4Good index for six years.

AOF – DETAILS

Key points

– Second in the world after Linde-Praxair in industrial and medical gases, born in 1902;

– Sales of 23.3 billion euros are structured in 3 areas: 96% gas and industrial services, engineering and construction followed by GMT – global markets and technologies;

– Balance of revenue by geographic area – 38% America, 33% Europe, 22% Asia-Pacific;

– A business model based on multi-year contracts (1/3 of revenue from twenty-year contracts) and long-term industrial partnerships, offering good visibility of future results and operating margins of more than 20%;

– Open capital, 33% for individual shareholders and 2.5% for employees, Benoît Poitier, chairman of the 12-member board of directors, François Jackow managing director;

– A healthy balance sheet, with net debt upgraded to A2, down to €12 billion or 46% of shareholders’ equity at the end of June, and free cash flow at 24% of sales.

Challenges

– Develop 225 strategy with 3 priorities:

– financial indicators: 5-6% annual growth in revenues, +10% return on capital employed through investment decisions of 16 billion euros between 2022 and 2025, half of which is dedicated to the energy transition;

– decarbonization of industry: low-carbon industrial gases, CO2 capture and management;

– technological innovation addressed to 5 professions: hydrogen mobility, electronics, healthcare, industrial trade and high technologies – space, cryogenics, quantum…;

– A €300 million + funded innovation strategy focused on operational excellence, openness to technologies in core business or disruption through:

– a global network of 6 innovation campuses, + 400 academic partnerships;

– special laboratories: digital factory for data expertise, Alizent for IoT, m-Lab for molecules, i-Lab for deciphering trends, 60% of them for energy transition, etc.

– in alliance with ALIAD venture capital fund, Chinese fund CSE and Accelair fund;

– An environmental strategy approved by the SBTi and aiming for carbon neutrality by 2050 with 2 intermediate goals through 2025 (start of absolute emissions reduction) and 2035 (33% reduction compared to 2015):

– CO2 capture, hydrogen production by electrolysis, decarbonation solutions,

– 8 billion euros will be invested in the hydrogen value chain by 2035,

– Cooperation and participation in a 200 million euro dedicated fund to support SMEs offering environmental solutions with Rothschild & CO and Solar Impulse – a global financing fund for low-carbon hydrogen (shortly invested 1.2 billion euro with Baker) Hughes, Charg Industries, Plug Power, TotalEnergies and Vinci, for a leverage effect of 15 billion euros),

– increase of renewable energy sources;

– Ability to pass on higher energy prices to customers;

– Activity visibility: EUR 3.4 billion worth of ongoing projects and EUR +3 billion of industrial investment opportunities at the end of September, of which 40% is in the energy transition.

Challenges

– Russia-Ukraine conflict: exceptional provision for Russian assets and withdrawal from Russia;

– Energy inflation: savings (€262 million in the first nine months) and pass-through of costs to customers, but offset by difficulties with European customers of the Big Industry division;

– Growth prospects in operating margin and net current profit for 2022, after 8.3% growth in turnover and 5.3% in net profit at the end of September.

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