Gas & Services revenue totaled 19,656 million euros, very close to 2019 on a comparable basis, at -1.2%. Sales as published were down -6.6% in 2020, affected by unfavorable currency (-2.1%), energy (-1.9%) and significant scope (-1.4%) impacts. The significant scope impact mainly reflects the disposal of Schülke in Healthcare.
-- Gas & Services revenue in the Americas totaled 7,799 million euros in
2020, a decline of -3.7% on a comparable basis. In North America, sales
started improving sequentially in the 3rd quarter but remained down
compared with 2019. Sales were up markedly in Latin America in 2020,
mainly driven by a start-up in Large Industries in Argentina and strong
demand for medical oxygen. Large Industries revenue in the region was up
+1.4%. Industrial Merchant saw a strong sequential recovery over the 2nd
half of the year, but annual revenue remained down by -7.1%. Healthcare
is still fully committed to the fight against the pandemic notably with
the supply of medical oxygen, and posted annual sales growth of +7.7%.
Electronics posted solid growth of +5.2%.
-- With comparable growth up +1.3% in 2020, sales in Europe reached 6,826
million euros. Industrial activities, which were particularly affected by
the public health crisis from mid-March, started to recover from the
beginning of May and markedly accelerated its recovery during the second
half of the year. Large Industries sales were down by -1.0% over the
year. Industrial Merchant recovered during the 2nd half of the year, but
its annual revenue, which was down -5.6%, remains impacted by the crisis.
Healthcare activities were strongly mobilized in the fight against
Covid-19, and posted revenue growth of +9.7% over the year.
-- Revenue in Asia-Pacific remained stable (-0.1%) in 2020 on a comparable
basis, and stood at 4,467 million euros, with all industrial activities
posting growth during the 4th quarter. China (+3.4%) brought a strong
contribution thanks to a quick recovery across all activities. The
recovery was slower in the rest of the region. Large Industries (+0.2%)
was driven by the ramp-up of a unit in South Korea. Industrial Merchant
(-3.6%) remained sluggish, despite the strong recovery in sales in China
during the 2nd half of the year. Electronics (+3.6%) momentum was very
dynamic with growth exceeding +10% over the year excluding Equipment &
Installation sales.
-- Comparable growth was down -2.6% in 2020 in the Middle East and Africa,
and revenues reached 564 million euros. Following a customer turnaround
at the beginning of the year, Large Industries sales were up during the
2nd half of the year. Industrial Merchant revenue, which was strongly hit
by the Covid-19 crisis during the 2nd quarter, saw a return to growth
during the 4th quarter. Healthcare is committed to the fight against
Covid-19 and posted strong growth across the region.
Healthcare was fully committed to ensuring the supply of oxygen to hospitals to treat Covid-19 patients and posted significant comparable growth of +8.5% for 2020. Electronics also recorded a very solid growth of +3.9% and +7.9% excluding Equipment & Installations sales. Large Industries sales remained stable in 2020 at -0.1% despite the public health context. Industrial Merchant sales were down -6.3% on a comparable basis, negatively impacted by the crisis but supported by solid pricing impacts of +2.6% and growth in several developing economies.
Consolidated Engineering & Construction revenue stood at 250 million euros for 2020, with a sharp increase of +24% in the 4(th) quarter. Third-party customer sales were down -23% over the year, reflecting the slowdown due to the public health crisis whereas total sales saw a more moderate decline of -9% for the year. Order intake for 2020 reached 820 million euros.
Global Markets & Technologies revenue for 2020 reached 579 million euros, representing growth of +6.0% during a period marked by the public health crisis, driven by the biogas activity. Order intake for Group projects and third-party customers totaled 598 million euros, representing a dynamic increase of +14.3%.
Structural Efficiencies reached 441 million euros for 2020 and largely exceeded the annual objective which had been set at more than 400 million euros. Moreover, exceptional cost reductions under the public health crisis response plan were due to the low level of activity and are not, due to their nature, sustainable in the long-term.
The Group's operating income recurring (OIR) amounted to 3,790 million euros in 2020, stable as published (-0.1%) but up +3.6% on a comparable basis versus 2019. The operating margin (OIR to revenue) stood at 18.5%, marking a strong improvement of +120 basis points compared with 2019 and of +80 basis points excluding the energy impact. Gas & Services operating margin as published stood at 20.4%, an improvement of +130 basis points compared with 2019, and of +90 basis points excluding the energy impact.
Despite the pandemic, net profit (Group share) amounted to 2,435 million euros in 2020, a significant increase of +8.6% as published and of +11.2% excluding the currency impact. Net earnings per share at 5.16 euros, were up significantly (+8.5%) compared with 2019, in line with the increase in net profit (Group share).
Cash flow from operating activities before changes in net working capital totaled 4,932 million euros, representing an increase of +1.5% despite a slowdown in activity due to the public health crisis, and once again underlining the resilience of the business model. This corresponds to a record high of 24.1% of sales, a marked improvement of +190 basis points compared with 2019. Working capital requirement (WCR) decreased significantly, by 364 million euros compared with December 31, 2019.
Gross industrial capital expenditure reached 2,630 million euros and was stable overall compared with 2019. This represented 12.8% of sales, reflecting strong project developments despite the public health crisis. Proceeds from sale of assets were exceptionally high in 2020 at 800 million euros and notably included the disposal of the Schülke. The net debt-to-equity ratio stood at 55.8%, a marked decrease compared with the end of 2019.
Industrial investment decisions were higher than 3.0 billion euros for the second year in a row despite the challenging public health context. The 12-month portfolio of investment opportunities stood at 3.1 billion euros at the end of December, with several new entries during the 4(th) quarter. The type of opportunities has changed significantly and the energy transition represents 44% of the portfolio.
The additional contribution to sales of unit start-ups and ramp-ups totaled 191 million euros in 2020 despite the public health crisis. The additional contribution to 2021 sales of unit start-ups and ramp-ups should reach around 250 million euros. The 16 units that are currently being acquired in South Africa should bring an additional contribution estimated at around 100 million euros for 2021 in a first phase, sales should then exceed 400 million euros per year during a second phase, when energy management will be fully integrated, without any significant impact on operating income.
The return on capital employed after tax (ROCE) was 9.0% in 2020. Recurring ROCE(1) stood at 8.6%, stable compared with 2019 despite the decline in business due to the public health crisis.
Air Liquide's Board of Directors, which met on February 9, 2021, approved the audited financial statements for the 2020 fiscal year. The Statutory Auditors are in the process of issuing a report with an unqualified opinion.
At the next Annual General Meeting, the Board of Directors will propose the payment of a dividend of 2.75 euros per share, up +1.9% compared to prior year and in line with the recurring net profit growth. The ex-dividend date has been set for May 17, 2021 and the payment is scheduled for May 19, 2021. In addition, the Board of Directors has decided to allot again one free share for every 10 shares. This allotment is considered for June 2022.
The Board of Directors also approved the draft resolutions that will be submitted for a vote by the General Meeting on May 4, 2021, notably in order to:
-- renew, for a period of four years, the term of office of Mr. Xavier
Huillard, an independent Director since 2017, Chairman of the
Remuneration Committee and member of the Appointments and Governance
Committee. Mr. Huillard will continue to provide the Board of Directors
with the benefit of his experience as the head of a large international
company and his extensive knowledge of the construction business.
-- appoint Mr. Pierre Breber, Mr. Aiman Ezzat and Mr. Bertrand Dumazy as
Directors, for a period of four years:
-- Pierre Breber is an American citizen and Vice-President and Chief
Financial Officer of Chevron, where he has held several management
positions spanning a career of over 30 years. He will bring to the
Board his strong operational and financial skills, and his very
international profile.
-- As Chief Executive Officer of Capgemini, Aiman Ezzat will bring to
the Board his extensive experience in the digital sector, his
financial expertise, his knowledge of many industrial sectors, and
the perspective of a chief executive from a major international
group.
-- Bertrand Dumazy, Chairman and Chief Executive Officer of Edenred,
will bring to the Board his managerial skills acquired at several
companies in both the industrial and service sectors, together
with his experience in digital transformation and change
management.
(MORE TO FOLLOW) Dow Jones Newswires
02-10-21 0135ET
