All businesses contributed to growth in 2019, in particular Healthcare and Electronics. Large Industries (+3.4%) benefited notably from sustained hydrogen volumes in Europe and Asia and from the ramp-up of several new units. In a less favorable economic environment in the 4th quarter 2019, Industrial Merchant growth reached +1.9% over the year, driven mainly by efficient price management (+3.6%), including helium. Strong healthcare growth (+5.7%) was due to organic sales growth, in particular in Home Healthcare in Europe and Latin America and in Medical Gases in the United States. Electronics revenue maintained a very dynamic growth momentum over the year (+7.9%) with double-digit growth for Carrier Gases and Advanced Materials sales.
Consolidated Engineering & Construction revenue, at 328 million euros, was down compared with 2018, with resources mainly allocated to internal projects in Large Industries and Electronics. Total sales including Group projects were up, boosted by a record-high level of investment decisions, in particular in Large Industries.
Global Markets & Technologies revenue was up +14.9% in 2019 on a comparable basis, at 552 million euros. Biomethane grew strongly thanks to the ramp-up of several units in Europe. Sales of equipment related to the Turbo Brayton technology, which reduces greenhouse gas emissions when transporting natural gas by sea, also strongly contributed to this growth.
In 2019, efficiencies increased markedly by +23.4% to 433 million euros, compared with 351 million euros in 2018. These represented savings of 2.7% of the cost base and largely exceeded the objective, which had been set at more than 400 million euros after the reinforcement of the program at the beginning of the year. The main drivers of this increase in efficiencies are the roll-out of digital tools, the continuation of the realignment plans and the ramp-up of Airgas within the program.
The Group’s operating income recurring (OIR) reached 3,794 million euros for 2019, a published increase of +10.0%, or +7.5% on a comparable basis. The operating margin (OIR to revenue) stood at 17.3%, a marked improvement of +90 basis points compared to 2018 and of +70 basis points excluding the energy impact, including +10 basis points from the application of IFRS 16. The Gas & Services operating margin stood at 19.1%, an improvement +60 basis points compared with 2018 excluding the energy impact.
Net profit (Group share) amounted to 2,242 million euros in 2019, an increase of +6.1% as published and +6.7% excluding the application of IFRS 16.
Excluding the capital loss on the disposal of the Fujian Shenyuan units in 2019 and the non-recurring financial gain in 2018, recurring net profit Group share(a) was up +11.1%.
Cash flow from operating activities before changes in working capital requirement totaled 4,859 million euros and stood at 22.2% of Group sales (21.0% excluding the application of IFRS16). This represented strong published growth of +14.5% (+8.3% excluding the application of IFRS 16).
In 2019, gross industrial capital expenditure for the Group amounted to 2,636 million euros, a major increase of +17.2% compared to 2018. It represented 12.0% of sales. The net debt-to-equity ratio stood at 64.0% at the end of December 2019, an improvement of -480 basis points compared to the end of 2018.
Industrial and financial investment decisions represented a total of 3.7 billion euros in 2019, a +19.8% increase compared with 2018. Industrial investment decisions reached a record high of 3,157 million euros, with major investments for long-term contracts with Large Industries customers, mainly in strategic basins where the Group is already present. The 12-month portfolio of opportunities remained strong and totaled 2.9 billion euros, an increase compared with 2.6 billion euros at the end of 2018.
Recurring ROCE(b) which excludes the capital loss on the disposal of the Fujian Shenyuan units on net profit, stood at 8.6%, i.e. a +60 basis points improvement compared to the end of December 2018. This improvement is in line with the Group’s NEOS target of returning to a ROCE of above 10% by 2021-2022.
Regarding to the extra financial performance of the Group, lost time accident frequency improved and reached 1.2 at the end of 2019. This represents the lowest employees lost time accident frequency rate of the last 20 years. In 2019, the Group’s carbon intensity declined further and reached 4.6 kg of CO2 equivalent per euro of EBITDA(c). It is lower than the initial forecast, notably from the disposal of the Fujian Shenyuan units but also because of several customer maintenance turnarounds, leading to lower production volumes. In January 2020, the Group’s commitment has been rewarded twice by the CDP(d), who gave Air Liquide the highest grade “A” both for its actions in favor of climate and its sustainable management of water. In addition, Air Liquide had 29% of women among engineers and managers in 2019 and aims to reach 35% by 2025.
Air Liquide’s Board of Directors, which met on February 10, 2020, approved the audited financial statements for the 2019 fiscal year. The Statutory Auditors are in the process of issuing a report with an unqualified opinion.
At the next Annual General Meeting the payment of a dividend of 2.70 euros per share will be proposed. Following the free share attribution of 1 for 10 in October 2019, the proposed dividend shows a strong growth of +12.4% compared with last year. The ex-dividend date is scheduled for May 11, 2020 and the payment is scheduled for May 13, 2020.
(a) Excluding exceptional and significant transactions that have no impact on the operating income recurring.
(b) Return on capital employed based on the recurring net profit, excluding exceptional and significant operations not impaching the operating income recurring.
(c) At 2015 exchange rate.
(d) A non-profit organization that evaluates companies based on their climate action.
