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 4th 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%.
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. This improvement results both from structural efficiencies, which amounted to 441 million euros over the year and greatly exceeded the annual objective set at more than 400 million euros, and from exceptional cost reductions under the public health crisis response plan, which were due to the low level of activity and are not, due to their nature, sustainable in the long term.
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, benefitting from the completion of operations and the contribution of the capital gain on the disposal of Schülke. Recurring net profit (a) improved by 1.5%. 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%. 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 – returning to levels seen prior to the Airgas acquisition.
Industrial investment decisions were higher than 3.0 billion euros for the second year in a row. The 12-month portfolio of investment opportunities stood at 3.1 billion euros at the end of December, with several new entries during the 4th quarter. The type of opportunities has changed quickly 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. In 2021 this contribution should reach around 250 million euros. The 16 units that are currently being acquired in South Africa should also bring around 100 million euros of additional sales 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 (b) 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.
(a) Excluding exceptional and significant transactions that have no impact on the operating income recurring.
(b) Return on capital employed, based on the recuring net profit.
