EuroBusiness Media (EBM): Air Liquide, the world leader in gases for industry, health and the environment, reports results for the full year 2009. Benoît Potier, welcome. You are the Chairman and CEO of Air Liquide. What were the performance and main achievements of the Group in 2009?
Benoît Potier (BP): Despite the unprecedented slowdown of the global economy in 2009, we have once again shown the resilience of our businesses and our ability to deliver a regular performance: we have reached our targets for 2009, with revenues close to 2008 levels and growth in net profit. Revenue reached 12 billion euros and net profit 1.23 billion euros, up 0.8%. In 2009, our ALMA strategic program was focused on 3 priorities: cash management, cost control, and capital expenditure. In other words, we took action in parts of the business which are directly under our control. Our operating margin reached a record level of 16.3%, thanks to efficiency gains worth 335 million euros. We have reduced our debt level, and our return on capital has been maintained within the 11 to 12% range. I think we can safely say that Air Liquide successfully minimized the impact of the crisis, while preserving its growth momentum. We have also strengthened our financial capabilities to allow us to seize opportunities for future growth.
EBM: And what were the main achievements last year?
BP: Among our main achievements in 2009, I would like to highlight the successful start up of 15 new production units, in China, South Korea, Malaysia, the US and Portugal. We commissioned next generation standard units. We significantly boosted our photovoltaic business, where Air Liquide is now clearly the leading industry supplier. We also made progress in technological areas, such as carbon capture and storage, hydrogen energy and second generation biofuels. In Healthcare, we made new acquisitions in homecare (in the UK, Tunisia and the Netherlands), and we developed our hygiene business in the context of the swine flu pandemic. Lastly, we developed our business in emerging economies, with some noteworthy achievements in Russia, Vietnam, the Middle East, and China for example.
To sum up, in 2009 Air Liquide had the best performance of any company in its industry. For this, I would like to express my appreciation to our 42,300 employees in 75 countries who collectively made it possible for us to achieve this performance.
EBM: What is your outlook for 2010? Are you confident that a recovery is underway?
BP: Yes, I think it’s safe to say that the recovery is confirmed, even though it still remains quite gradual depending on regions or markets. We see a dynamic recovery in most of the emerging economies but the pace of recovery is still slow in mature economies. We remain confident in the outlook for 2010, as we plan to start up a record number of new plants, with 20 projects currently underway. On a 12-month horizon, our current portfolio of opportunities is almost as large today as it was in 2008. We plan to continue our industrial investment strategy, planting the seeds today for the growth of tomorrow; to secure the medium to long-term growth of the company. In the short term, the recovery of the business is apparent, but expected to remain gradual depending on regions or markets. In such a context, and barring a major economic upset, Air Liquide expects continuous growth in net profit in 2010, in line with its long term performance. We remain confident in our ability to generate solid and sustainable medium-term growth.
EBM: When you launched the ALMA strategic program, your stated ambition was for Air Liquide to be the recognized industry leader. Has this ambition been revised as a result of the crisis?
BP: Our ambition of being the recognized global leader in our industry remains unchanged. However, we have to acknowledge that the world has changed as businesses face the crisis and economies strive for stability and recovery. 2010 will definitely be a year of transition as the world emerges from the recession, and we will take advantage of 2010 to update our medium term targets in the framework of our ALMA strategic program. We will reassess our markets given the changes they might have experienced, scoping out potential opportunities in our different markets and geographies. We remain confident in the progressive return toward sustained growth in mature countries, and dynamic growth in Emerging economies. Thanks to our ALMA program, we remain as committed as ever to our goal of being the recognized industry leader in our sector.
EBM: What is the outlook for the dividend payment this year?
BP: First, I would like to take this opportunity to thank our individual and institutional shareholders, who have continued to demonstrate their confidence in the company during these trying times. Now, regarding the dividend, the Board is proposing a dividend payment of 2.25 euros per share, the same as for the previous fiscal year. Furthermore, in the current challenging economic environment, the Board has decided to award one free share for 15 existing shares on May 28, 2010, subject to the necessary approvals at the next Annual General Meeting. As you can see, we strive once again this year, as we have done for the past 30 years, to ensure that the confidence that shareholders place in us is properly rewarded.
EBM: What are your views on the post-crisis world which we are entering and which is still currently taking shape? How well is Air Liquide positioned to take advantage of the new challenges that will undoubtedly follow such a massive reshuffling of the cards in the global economy?
BP: I am convinced that Air Liquide has structural advantages and a positioning that will enable it to come out on top in the new global environment. Our portfolio of new investment projects is nearly at the level where it was in 2008. This is offering us growth opportunities for the years to come. We are well positioned in emerging economies, which are still continuing to build up their industrial infrastructure, and represent 16% of our revenue in 2009. We continue to expand our business and accelerate our growth in those geographies, increasing our investment commitment in the fourth quarter. In mature economies, the Energy and Environment segments together make up a potential market of more than 30 billion euros per year by 2020. Most CO2 emission reduction solutions – whether in the fields of energy efficiency, renewables or clean conversion – offer further opportunities for Air Liquide. This is equally true for Health and High-Tech which continue to expand, driven mainly by innovation and services. Despite the crisis, our 5 growth drivers remain intact: Energy, the Environment, Emerging Economies, Health and High-Tech. They are all borne out of deep underlying long-term trends in society today. That is why I believe Air Liquide is well prepared to seize the opportunities in the world taking shape before us.
EBM: Benoît Potier, Chairman and CEO of Air Liquide, thank you very much.
BP: Thank you.
