Invitation to our General Meeting 2023

Group revenue for 2022 totaled 29,934 million euros, a strong comparable growth⁽¹⁾ of +7.0% over 2021. The Group’s revenue as published posted a significant increase of +28.3% in 2022, with a record high energy impact of +15.3% as well as a favorable currency impact of +5.8%, while the significant scope impact was limited (+0.2%).

This performance was delivered in a challenging context of exceptionally high energy prices, strong inflation, strain on supply chains and the conflict in Ukraine. The Group benefited from a solid business model and diversity of business reach in terms of geographies, businesses, end-markets and customers which ensured a resilient performance and allowed the Group to take advantage of all growth opportunities. The ADVANCE strategic plan reinforces these attributes which position the Group in growth markets of the future (in particular the energy transition, Semiconductors and Healthcare).

Gas & Services revenue in 2022 totaled 28,573 million euros, a strong comparable increase of +6.1%. The growth stood at +28.3% as published: the energy impact (+16.1%) reached a record level over the year, with a peak in the 3^rd quarter, the currency impact (+5.8%) also made a positive contribution, while the significant scope effect (+0.3%) remained limited. The latter corresponds to the additional contribution in 2022 of the 16 Sasol units acquired in June 2021, less the effect of the deconsolidation of the activities in Russia from September 1, 2022.

• Gas & Services revenue in the Americas totaled 10,680 million euros in 2022, up sharply by +10.2% on a comparable basis. The Large Industries business (+3.7%) benefited from the start‑up of several production units and solid demand. In the Industrial Merchant business, sales increased by +13.5%, supported by the strong increase in prices. Despite a high basis of comparison due to the covid‑19 pandemic in 2021, Healthcare revenue was up +3.9% thanks to the development of the proximity care business in the United States and the Home Healthcare business in Latin America. Finally, Electronics posted sales up +5.8% over the year, driven by strong growth in Carrier Gases and Specialty Materials.
• Revenue in Europe was up +2.0% on a comparable basis in 2022 and totaled 11,390 million euros. Sales evolution was contrasted depending on business lines. In a context of very high energy prices, Large Industries sales were down by ‑16.6% over the year, strongly impacted by volumes down ‑8% and a combined effect⁽²⁾ in the 3^rd quarter. The Industrial Merchant business line saw an exceptionally high level of sales growth of +24.1%, benefitting from a record price effect of +23.6%. Healthcare revenue posted an increase of +4.4%, supported by the dynamism of Home Healthcare and despite a high basis of comparison due to the covid‑19 pandemic in 2021.
• Revenue for the Asia‑Pacific region in 2022 rose sharply by +7.0% on a comparable basis, to a total of 5,608 million euros. It benefited from particularly dynamic growth in the Electronics business (+17.8%). Sales in Large Industries were stable (+0.3%), with the covid‑19 pandemic disrupting business growth in China, while sales in the rest of Asia remained low throughout the year. In Industrial Merchant, sales benefited from a sharp rise in prices and increased by +4.2%.
• Revenue for 2022 in the Middle East and Africa was up +0.8% to 895 million euros. Volumes in Large Industries increased sharply in South Africa with the integration of the 16 Sasol Air Separation Units, whose acquisition was finalized at the end of the 1^st half of 2021; thus sales of 126 million euros over the year were accounted for in the significant scope impact and hence excluded from comparable growth. In Industrial Merchant, sales were down over the year, with the +6.4% increase in prices not fully offsetting the divestiture of small businesses in the Middle East.

The two growth drivers for 2022 were the Industrial Merchant business, with sales up +14.2%, supported by a record price effect of +14.7% and resilient volumes, and the Electronics business, with revenue up +16.4%. Despite a high basis of comparison in 2021 related to covid‑19, sales in Healthcare increased by +3.6%, supported by the strong development of Home Healthcare, particularly in Europe, and proximity care in the United States. Sales in Large Industries were down ‑6.6%, marked by mixed activity depending on the geography: in Europe, the decline in volumes was part of a context of an exceptionally strong increase in energy prices, while sales increased in America and remained stable in Asia.

Consolidated revenue from Engineering & Construction totaled 474 million euros in 2022, up strongly by +20.6%. Order intake for Group projects and third‑party customers exceeded 1 billion euros for the second consecutive year.

Global Markets & Technologies revenue for 2022 reached 887 million euros, representing a very high growth of +25.8% compared to 2021. Biogas maintained strong momentum and sales of Turbo‑Brayton LNG reliquefaction units contributed to the growth. Order intake for Group projects and third‑party customers totaled 875 million euros, representing a dynamic increase of +25% compared to 2021.

Efficiencies amounted to 378 million euros over the year. They represent a saving of 2.2% of the cost base. In a context of high inflation unfavorable to procurement efficiencies, the priority for the teams is to limit cost increases and transfer them to sales prices.

The Group's operating income recurring (OIR) reached 4,862 million euros. It was up sharply by +16.9% as published and +10.5% on a comparable basis, which is significantly higher than comparable sales growth of +7.0%. The operating margin (OIR to revenue ratio) stood at 16.2% as published, representing a ‑160 basis point decline compared with 2021, due to the sharp increase in energy costs which are contractually passed through to Large Industries' customers. This, therefore, has a mechanical dilutive impact on the published margin. Excluding the energy impact, the operating margin improved very significantly by +70 basis points. This performance integrates the dilutive impact of strong inflation on costs other than energy costs, in Industrial Merchant in particular, and which is transferred to sales prices. This operating income recurring improvement therefore particularly reflected the Group’s ability to rapidly transfer to sales prices the exceptionally strong and brutal increase in energy costs and inflation in general.