Industrial Merchant sales decreased by -8.7%. The impact of the pricing campaigns conducted in 2008 and the beginning of 2009 remains positive. There was a clear sequential improvement in Bulk volumes, and a slight recovery in Cylinder volumes in September. Activity is picking up in the emerging European economies.
There was sequential growth in Large Industries volumes, particularly in air gases. Sales were down -3.6% relative to third quarter 2008, with volume improvements masked by a high 2008 comparison and a smaller contribution from start-ups.
Up +8.2%,Healthcare growth accelerated sequentially driven by substantial demand for hygiene products due to H1N1 flu preventive measures in hospitals as well as in the work-place. Growth was sustained in homecare and hospital gases, in line with previous quarters.
Electronics was down slightly, by -1.7%, a clear turnaround compared to previous quarters. This was due largely to a recovery in ESG sales, associated with an upturn in fab activity, as well as solid equipment sales in the photovoltaic sector.
Americas
Revenue for the Americas was 552 million euros, down -8.0%. The pace of growth in South America recovered following a slight downturn in the second quarter 2009. In the United States, revenue was negatively impacted by the decline in electricity prices passed through to customers.
Industrial Merchant sales fell by -11.4%. Pricing remained positive across the region, particularly in South America. Liquid and cylinder volumes in the United and States and Latin America gradually improved over the quarter compared to second quarter 2009, but remain below previous year levels.
The sequential recovery in Large Industries volumescontinued throughout the region. Chemical sector demand returned to close to 2008 levels, while in the Steel sector, two blast furnaces were restarted in Canada. In Latin America, volumes showed a clear sequential improvement. Nevertheless, revenue was impacted by the pass-through to customers of the significant decline in electricity prices, particularly in the United States. As a result, sales decreased by -6.8% in the period.
Electronics sales declined by -15.8%. Although ESG demand recovered sequentially, Equipment & Installations sales continued to decline significantly, in the absence of new investments in the sector.
Growth in Healthcare was strong at +11.9%, driven by higher demand for hospital equipment in North America and dynamic homecare sales in Latin America.
Asia-Pacific
Asia-Pacific revenue was 490 million euros, down by -11.2% in the third quarter. There were sequential improvements throughout the region but activity in Japan remained weak. Electronics benefited from recovery in ESG volumes, while growth in China remained dynamic.
Industrial Merchant sales fell by -10.7%, with weak industrial activity in Japan offsetting a significant upsurge in China, from new filling capacity and stronger demand.
With a -24.3% drop in sales, the trend in Electronics has again improved sequentially in the third quarter (+12%), despite significantly lower year on year Equipment and Installations. This trend is due to the steady performance of carrier gas sales and the strong recovery of ESGs. Semi-conductor and flat screen customers saw a pick-up in their activity during the summer to meet year-end seasonal demand. Despite evident excess capacity in the photovoltaic industry, demand for solar panels and the number of construction projects for new facilities remained high.
Large Industries sales grew by +5.4% for the period, positive for the first time since third quarter 2008. With the ramp-up of two new major units for the steel industry, China now has the scale to offset the sharp drop in activity in Japan.
Middle-East and Africa
Revenue for the Middle-East and Africa region was 68 million euros, up +20.4%. The combination of the ramp-up of numerous Large Industries units and the recently acquired Bulk and Cylinder distribution capabilities in the Middle East is generating commercial synergies in the industrial basins where the Group is present.
1.2 Engineering and Construction
Third-party Engineering and Construction sales were 282 million euros, up +10% due to the progress of major projects in China, Korea and South Africa. As a result, year-to-date sales totaled 787 million euros, in line with the one billion euro revenue target for the year. Order-intake was low, with a slow-down in the client decision-making process seen, particularly during the summer. Total order-intake since the beginning of the year reached 437 million euros.
1.3 Other activities
Revenue Q3 2008 Q3 2009 Q309/08 In millions of euros changePublished =----------------------------------------------------------------- Welding - Cutting 143 92 -35.2% =----------------------------------------------------------------- Diving and Specialty Chemicals 90 92 +1.6% =----------------------------------------------------------------- Other activities 233 184 -20.9% =----------------------------------------------------------------- Other activities revenue was 184 million euros, a -21.0% decrease.
Welding - Cutting continues to be affected by the decline in industrial activity in the main European countries.
Specialty Chemicals improved on a sequential basis due to the steady performance of the vaccine and pharmaceutical sales. Diving benefited from a major contract during the period.
2. Strategic developments in the third quarter 2009
In the third quarter 2009, Air Liquide pursued its growth momentum in emerging economies, with several acquisitions and start-ups in the Middle East and Asia. Furthermore, the company confirmed its position as leader in the photovoltaic sector.
-- Air Liquide maintained its growth in the Middle East with the commissioning of a new nitrogen production unit in Oman and the
start-up of a new oxygen production unit in Egypt.
-- With the acquisition of 75% of Al Khafrah Industrial Gases in Saudi Arabia, whose annual revenue exceeds 20 million dollars, Air Liquide
strengthened its distribution network, thus consolidating its leading
position in a high potential region.
-- Two air separation units (ASU) with a daily production capacity of 4,000 tons were commissioned in China at the end of July, representing
an investment of around 90 million euros. They meet the needs of the
main production site of steelmaker Jiangsu Shagang, located about 100
km east of Shanghai, as well as those of other local industrial
customers. This long-term partnership with Jiangsu Shagang is the
largest "Over the Fence" contract (industrial gases supplied by
pipeline) in China.
-- In early October, a long-term carrier gas supply agreement was signed with Semiconductor Manufacturing International Corporation (SMIC), the
leading manufacturer of integrated circuits in China, for its new
wafers production plant. Air Liquide will invest around 13 million
euros in the project's initial phase. A partner since 2001, Air
Liquide already serves SMIC sites in Shanghai, Peking, Tianjin,
Chengdu and Wuhan.
-- Air Liquide will also build a production unit at the Thalheim high-tech business park in Germany, representing an investment of
around 10 million euros. The unit, which will begin operations in
2010, will eventually produce 38,000 tons of nitrogen per year to meet
the growing demands of all solar cell manufacturers in the region.
-- Air Liquide's latest world scale hydrogen production unit began operations on September 29, 2009 in California, on the north eastern
shore of the San Francisco Bay. US production capacity has thus been
more than doubled within the last five years.
-- In addition, two small acquisitions in the Healthcare sector were completed during the quarter in Europe to strengthen the Group's
positions in Germany and the Netherlands.
At the end of September 2009, the Group's portfolio of opportunities increased to 2.9 billion euros compared to the end of June 2009. Emerging economies and Energy account for 80% and 46% of the portfolio, respectively. Over 20% of the portfolio, at the end of September 2009, consists of plant take-over projects in exchange for long-term gas supply contracts.
Investment decisions have dwindled since the beginning of the year due to extended tender processes. For the first nine months of 2009, decisions amounted to 640 million euros.
Capital expenditure is in line with the 2009 objective of 1.6 billion euros.
A total of 36 units are forecast to start up in 2009 and 2010. A few projects that had been planned to start at the end of 2009 have been postponed to early 2010 and the target contribution of one billion euros from all start-ups since 2006 should now be reached in 2011.
3. Alma 2009 ahead of its yearly objectives
The adaptation of the Alma project to the 2009 context led to tight management focus on reducing costs, working capital and capital expenditure (Cost, Cash & Capex). The results are visible.
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Publié le 22 octobre 2009 Copyright © 2009 Dowjones