L'Air Liquide S.A. Annual Report 2017

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FY2017 Annual Report · L'Air Liquide S.A.

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P o s i t i o n s
r e i n f o r c e d

#GEOGRAPHIES #MARKETS #DIGITAL

2 0 1 7
A N N U A L R E P O R T

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C o n t e n t s

EDITORIAL
Benoît Potier, Chairman and CEO

BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

STRATEGY EXECUTION

A CUSTOMER-CENTRIC
TRANSFORMATION STRATEGY

CONTRIBUTING TO SUSTAINABILITY

CREATING VALUE OVER THE LONG-TERM

POSITIONS REINFORCED

REINFORCING OUR LEADERSHIP
IN THE UNITED STATES

UNLOCKING POTENTIAL THROUGH DIGITAL

AT THE HEART OF CHANGES
IN HEALTHCARE

A BIG PLAYER IN THE INFINITELY SMALL

TOWARDS A HYDROGEN SOCIETY

2017 PERFORMANCE

KEY FIGURES FOR 2017

2017 AIR LIQUIDE NEWS

FINANCIAL INFORMATION

Discover the Group at airliquide.com
and on social media: Twitter, Facebook
and LinkedIn

I N T E R N E T
See our annual publications:
Annual Report, Reference Document,
Shareholder’s Guide, Interactions, and more.
www.airliquide.com

The world leader in gases, technologies and services for Industry
and Health, Air Liquide is present in 80 countries with approximately
65,000 employees and serves more than 3.5 million customers
and patients. Oxygen, nitrogen and hydrogen are essential small
molecules for life, matter and energy. They embody Air Liquide’s
scientific territory and have been at the core of the company’s
activities since its creation in 1902.

Y O U T U B E
Air Liquide Corp Channel

T W I T T E R
@AirLiquideGroup

Air Liquide’s ambition is to lead its industry, deliver long term
performance and contribute to sustainability. The company’s
customer-centric transformation strategy aims at profitable
growth over the long term. It relies on operational excellence,
selective investments, open innovation and a network organization
implemented by the Group worldwide. Through the commitment
and inventiveness of its people, Air Liquide leverages energy and
environment transition, changes in healthcare and digitization, and
delivers greater value to all its stakeholders.

L I N K E D I N
linkedin.com/company/airliquide

Air Liquide’s revenue amounted to 20.3 billion euros in 2017
and its solutions that protect life and the environment represented
more than 40% of sales. Air Liquide is listed on the Euronext Paris
stock exchange (compartment A) and belongs to the CAC 40, EURO
Published by the Communications department of the Air Liquide group, April 2018
STOXX 50 and FTSE4Good indexes.
75 quai d’Orsay, 75007 Paris, France

Photos credits: Thomas Laisné / La Company, Gilles Leimdorfer / Interlinks Image, Augustin Detienne / CAPA Pictures, Bryan Meltz
/ CAPA Pictures, Gabo Morales / CAPA Pictures, Patrick Wack / CAPA Pictures, Pierre-Emmanuel Rastoin, Fotolia, Adrien Daste,
Getty Images, Jean-Philippe Mesguen, iStock, Lucas Schifres / CAPA Pictures, Fotolia, Joseph Melin, Mourad Mokrani, Christophe
Peus / CNES, ArianeGroup Holding, Air Liquide, Stéphane Remael / La Company, Kadeg Boucher, Thinstockphotos.

Design & Production:

(ref.: ALRA017)

L’Air Liquide - S.A. company established for the study and application of processes developed by Georges Claude
with issued capital of 2,356,439,277.50 euros

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EDITORIAL

Benoît Potier, Chairman and CEO

“In 2017 Air Liquide took
a new step in its development
and has acquired a new scale
with the successful integration
of Airgas.”

— Positions reinforced

In 2017 Air Liquide took a new step in
its development and has acquired a new
scale with the successful integration of
Airgas and the consolidation of Airgas
sales for the full year. This strengthened
the Group’s positions in terms of
geographical presence, especially
in the United States, the world’s largest
market for industrial gases. The Group
has also strengthened its market
positions by developing new product
offerings for its customers, by signing
new contracts and by continuing its
development in promising new markets.
2017 was also marked by significant
progress in customer experience,
customer satisfaction and digital
transformation. The bottom line is that
Air Liquide is reaping the benefits of
its major strategic move to acquire
Airgas in the U.S. in 2016, and is
beginning 2018 stronger and with
confidence.

— Improved performance

In 2017 Air Liquide has acquired
a new scale, with annual sales surpassing
20 billion euros and net profit of over
2 billion euros. In a more favorable global
economic environment, the Group has
recorded a good level of organic sales
growth. All Gas & Services activities
grew in 2017, notably Industrial Merchant,
which accounts for nearly half of the
revenue. On a geographic level, growth
was mainly driven by developing
economies, China in particular, the solid
level of activity in the Americas and
Europe during the second half, as well as
Large Industries projects in the Middle
East. The Group’s operating performance
has improved with significant efficiency

gains globally. Synergies related to Airgas
were also ahead of our forecast, and
contributed to the increase in the
operating margin and to higher net profit.
The high level of cash flow made an
important contribution to lowering net
debt by nearly 2 billion euros during the
year. The balance sheet of the Group is
therefore strong, enabling us to pursue
selective investments. New investment
decisions for 2.6 billion euros have
been made in 2017, and the industrial
investment backlog reached
2.1 billion euros at the end of 2017.
These investments will contribute
to the future growth of the Group.

More globally, Air Liquide remains
committed to reaching a high level of
performance each year and, in the
long-term, to creating value to ensure the
longevity of our business. This long-term
vision is also inherent to the Group’s
ambition of contributing more broadly
to the environment and the society.
In 2017, we started to roll out a Corporate
Sustainability Program structured around
two priorities: 1) the global warming
prevention and the improvement of air
quality, and 2) the strengthening of our
dialogue with the Group’s stakeholders.
So value creation exists alongside the
clarity of purpose, not only for our teams,
but also for all our stakeholders, thanks
to the initiatives we are implementing
in response to social and environmental
challenges.

— Strategic plan implementation
Regarding our NEOS Company

Program, all the initiatives identified have
now been launched and some made
significant progress during 2017. I would

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EDITORIAL

“Air Liquide remains committed
to reaching a high level of
performance each year and, in the
long-term, to creating value to ensure
the longevity of our business.”

like to mention a few of them which are
likely to provide new growth opportunities
in the areas of energy transition,
healthcare and electronics.

In hydrogen energy, major progress
has been made thanks to the Hydrogen
Council founded in early 2017. It is currently
composed of more than 30 companies
from various sectors, and has successfully
raised collective awareness in the interest
of including this molecule in the future
energy mix. This is supported by a
roadmap - established by the Council
members, outlining the potential of this
sector - as well as by a growing number
of concrete projects in Europe, Asia and
the United States.

In Healthcare, we have launched
innovative solutions to improve the quality
of care for chronic disease patients at
home and to strengthen links with
healthcare professionals. For example,
we have developed a connected
monitoring program for patients
with chronic heart failure in France,
which is designed to improve patient
health at the same time as helping
to limit healthcare expenditure by
reducing the need for hospitalization.

Finally, in Electronics, we have
launched a new line of advanced
materials for semiconductor etching.

This offer has been very successful,
in particular due to its etching precision
and its very significant environmental
benefits. This sector is currently driven
by the surge in Big Data, the development
of artificial intelligence, virtual and
augmented reality, the new generation
of flat panel displays, and the connected
car. These new needs generate increased
demand for carrier gases and high
value-added molecules.

— Customer experience
is central to these advances

We put customer experience and

satisfaction at the heart of our
transformation. More than 3.5 million
customers and patients now place their
trust in us every day. Their satisfaction
is crucial to the success of the Group,
and our efforts are guided by a process
of continuous improvement. For example,
we have launched a Voice of Customer
digital platform to provide real-time
gathering and analysis of feedback
from our customers. Having direct
access to customer opinions is
transforming the way we do business,
take decisions and set our priorities.
Our starting point is the needs of those
who use our products and services.
To a certain extent, we are turning the
pyramid upside down. The fundamentals
of a customer relationship remain in place,
as does our focus on safety and reliability.

But we are also committed to simplifying
our interactions with customers, providing
them with the solutions that allow them
to compete more effectively through the
use of digital tools or solutions that help
them reduce their environmental footprint.
In digital, the Group is capitalizing
on the Airgas model, with its strong
customer-centric culture and multi-
channel expertise. As the initial positive
feedback from customers and users
of our Airgas-inspired mygas.com portal in
Europe clearly shows, we made excellent
progress in this respect in 2017.

— Innovating and transforming
the Group

Innovation and digital are playing
a key role in our transformation. In 2017,
our innovation expenses reached
292 million euros. This is something
that sets us apart in our industry.
Digital transformation is a major factor
for our future development. It impacts
the way we manage our assets, the way
we interact with our customers and our
relationship with external ecosystems.

In terms of our operations, the best
example is the implementation of remote
operation and optimization centers for
the management of our Large Industries
production units. We started in France,
followed by China, and the latest
deployment is in Malaysia. The use of
digital technologies and data analysis
boosts our operational efficiency, and our
customers are the first to express their
satisfaction with this new development.

We are also focused on investment

in our R&D centers. We opened a new
research and technology center in

Shanghai during the year. The renovation
of our Paris Saclay Center in France is
coming to an end, and the center will be
officially opened in the second half of
2018. We also laid the foundation stone
for our future innovation center in Japan
last September. In a few years, all our R&D
centers will have been renovated.
Lastly, we are also investing in start-ups.
Over the last five years, we have taken
minority stakes in 30 start-up companies
at a cost of around 80 million euros.
Open innovation is a major pillar of
our strategy, and we are now working
with more than 100 start-ups globally.

— Outlook for 2018

At the beginning of 2018, Air Liquide
is strengthened and better positioned.
Our priorities this year continue to focus
on operational excellence and growth,
with notably the start-up of major projects
in Large Industries during the year.
We will also pursue the transformation
of our activities, leveraging on innovation
and digital, as well as on the Airgas model
and its strong customer-centric culture.
In light of these elements, I am confident
in the Group’s medium-term growth
outlook.

“Innovation and
digital are playing
a key role in our
transformation.”

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GOVERNANCE

B o a r d
o f D i r e c t o r s

a s o f 1 2 - 3 1 - 2 0 1 7

BENOÎT
POTIER
Chairman
and CEO

JEAN-PAUL
AGON
Lead Director
Chairman of the
Remuneration
Committee
Chairman of the
Appointments
and Governance
Committee

PIERRE
DUFOUR
Chairman of the
Environment
and Society
Committee

THIERRY
PEUGEOT
Member of
the Audit and
Accounts
Committee

KAREN
KATEN
Member of the
Appointments
and Governance
and Governance
Committee

SIÂN
HERBERT-
JONES
Chairman of
the Audit and
Accounts
Committee

SIN-LENG
LOW
Member of
the Audit and
Accounts
Committee

ANNETTE
WINKLER
Member of the
Remuneration
Committee
Member of the
Appointments
and Governance
Committee

PHILIPPE
DUBRULLE
Director
representing
the employees
Member of the
Environment
and Society
Committee

GENEVIÈVE
BERGER
Member of the
Environment
and Society
Committee

BRIAN
GILVARY
Member of
the Audit and
Accounts
Committee

XAVIER
HUILLARD
Member of the
Remuneration
Committee

OVERVIEW OF 2017
On December 31, 2017,
the Board of Directors had twelve
members, eleven of whom are
appointed by the Annual
Shareholders’ Meeting, while
the twelfth member representing
employees is appointed by the
France Group Committee.
Nearly half of the elected
members are women. A total of
six nationalities are represented,

from three continents where
the Group operates: Europe,
the Americas and Asia. Directors
offer a wealth of competencies
(financial, managerial, industrial,
scientific, international
development and other skills)
in various sectors: cosmetics/
consumer goods, automotive,
petroleum/chemicals,
construction, health/research,
pharmaceuticals and services.

SOME EXAMPLES OF THE
BOARD’S WORK IN 2017
The Board of Directors determines
the main lines of Air Liquide’s
business. In this capacity, it examines
and approves the Group’s major
strategic developments. In 2017,
the Board of Directors focused on:
• the progress reports relating
to the integration of Airgas, and
the cost and growth synergies;
• questions relating to strategy

and particularly the Group’s
objectives determined as part
of the “NEOS” medium-term
company-wide program including
Airgas, developments in the use
of hydrogen energy, review
of the portfolio of businesses,
examination of the mergers
taking place in the industry;
• governance issues: the full
range of governance measures,
the change in composition

of the Board and its Committees
and the review of the monitoring
of risks;
• the questions relating to Corporate
Social Responsibility within the
scope of the Corporate Sustainability
Program launched in 2016 and the
2017 creation of a new special Board
Committee, in charge of examining
the Group’s environmental and
societal issues.

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GOVERNANCE

E x e c u t i v e
C o m m i t t ee

a s o f 0 1 - 0 1 - 2 0 1 8

BENOÎT POTIER
Chairman and Chief
Executive Officer
Born in 1957 – French

MICHAEL J. GRAFF
Executive Vice-President
Houston Hub Executive
Vice-President supervising Americas
Supervises Electronics Business
Line, Safety and Industrial systems
Chairman of the Board of Airgas
Born in 1955 – American

FABIENNE LECORVAISIER
Executive Vice-President in charge
of Finance, Operations Control and
General Secretariat
Born in 1962 – French

GUY SALZGEBER
Executive Vice-President
Frankfurt Hub Executive
Vice-President supervising
Europe Industries
Supervises Group Procurement
Born in 1958 – French

FRANÇOIS DARCHIS
Senior Vice-President
Innovation and Development
Vice-President
Supervises Information
Technologies, Industrial
Merchant Business Line
and the Group’s Corporate
Sustainability Program
Born in 1956 – French

JEAN-MARC DE ROYERE
Senior Vice-President
in charge of International,
Governance and the Group’s
Corporate Sustainability Program
Chairman of the Air Liquide
Foundation
Born in 1965 – French

FRANÇOIS JACKOW
Senior Vice-President
in charge of Healthcare activities
Supervises Africa,
Middle-East and India
Vice-President Customer Experience
Born in 1969 – French

FRANÇOIS VENET
Senior Vice-President
Strategy Vice-President
Supervises Large Industries
Business Line and Engineering
& Construction
Born in 1962 – French

PASCAL VINET
Chief Executive Officer of Airgas
Born in 1962 – French

ARMELLE LEVIEUX
Vice-President Group
Human Resources
Born in 1973 – French

FRANÇOIS ABRIAL
Shanghai Hub Executive
Vice-President supervising
Asia Paciﬁc
Born in 1962 – French

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The ambition of Air Liquide is to lead its industry, deliver long-term performance and contribute
to sustainability. To achieve this ambition, the Group is implementing a customer-centric
transformation strategy. In 2017, this strategy was rolled out successfully through all Group
activities and geographies, with concrete progress in terms of customer experience and digital.
Every day, Air Liquide creates value for its customers, its patients and all its stakeholders.

Strategy
execution

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STRATEGY EXECUTION

A c u s t o m e r - c e n t r i c
t r a n s f o r m a t i o n
s t r a t e g y

High reliability: the Group pays careful
attention to the quality of its products and
its compliance with current standards and
regulations. It works to supply its customers
on time in all circumstances while ensuring
their ability to operate continuously.

Enhanced competitiveness: Air Liquide
is unique in its precise understanding of
the needs and industrial processes of its
customers. It provides them with targeted
solutions that make them more competitive
in their markets. So, competitiveness
doesn’t end with cost and price, it also
includes quality, reliability and safety.

Solutions for the environment:
the Group develops brand new solutions
by leveraging its innovation capacity
in favor of cleaner industries. It helps its
customers reduce their CO2 emissions and
improve their environmental footprint. More
broadly, Air Liquide helps its customers,
particularly in developing economies,
shift from a strategy of “producing more”
to “producing better”.

Simple interactions: Air Liquide works
hard to make its customer journey more
fluid by simplifying interactions. Digital
technologies play a key role in this approach
as well as the listening skills and
engagement of its local teams.

More than 3.5 million customers and
patients across the world place their trust
in Air Liquide. All are operating in a changing
environment. The energy and environmental
transition, changes in healthcare as well as
digitization give rise to new usages and
challenges. In addition, the industrial offer
is increasingly moving toward an approach
centered on the end user, thereby
transforming the traditional value chain.

Air Liquide’s ambition is to lead its industry,
deliver long-term performance and
contribute to sustainability. To achieve this,
the Group is implementing a customer-
centric transformation strategy to deliver
long-term profitable growth. As such,
it relies on operational excellence,
selective investments, open innovation
and a network organization.

This transformation strategy is based
on innovation and leveraging digital.
It is implemented in the context of the
2016-2020 NEOS company program.
This program commits Air Liquide’s
65,000 employees to providing an
unrivalled experience in all its business
lines to the Group’s 3.5 million customers
and patients. This approach is part
of a continuous improvement process.

Examples:
Safety First: the constant attention
the Group pays to safety concerns its
employees, subcontractors, industrial
facilities, transportation and the
deployment of the Group’s products and
services with its customers and patients.

FOR LONG-TERM

PROFITABLE GROWTH

bility - Co m p e titi v

lia
e
R
-
y
t
e
f
a
S

s s -

S o l utions for the enviro

AN UNRIVALLED

CUSTOMER

EXPERIENCE

t -

r
a
c
t
i

o
n
s

A CHANGING
WORLD

• Energy and

environmental
transition
• Changes in
healthcare
• Digitization

TWO
PERFORMANCE
BOOSTERS

>3.5 M
custo mers
and patients

• In n ovat ion
• D igit al

CUSTOMER-CENTRIC
TRANSFORMATION

STRATEGY

Fo ur strategic pi lla rs

O P E R AT I O N A L
E XC E L L E N C E

• Unrivalled customer

experience

• Competitiveness
• Digitization of our operations

S E L E C T I V E
I N V E ST M E N T S

• Targeted investments
• In priority in the most

promising markets and
technologies

O P E N
I N N OVAT I O N

• Core and disruptive

technologies
• Opening up to

external partners

A N E T WO R K
O R G A N I Z AT I O N

• Agility and responsiveness
• Simplicity and efficiency
• Best practices sharing

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15
15

06/04/2018 21:08

STRATEGY EXECUTION

A cu s tomer -ce n tric
trans fo rm a tion
strate gy

The customer experience in the words
of those who live it, and those who strive
every day to make it even better.

E A SY TO D O
B U S I N E S S W I T H
T H O M AS H E I S E L
Air Liquide customer
Purchasing department,
Saarland university, Germany

“Air Liquide has been supplying
us with liquid helium for fourteen
years and cylinder gases since
January 2017. Recently, we started
using the MyGas customer online
Air Liquide portal and we love it!
It gives us greater flexibility in our
interactions with Air Liquide. For example,
we are free to determine when and
how often we check our inventories or
review our invoices. Through MyGas,
we can also easily get a good overview
of our orders and expected delivery
dates, as well as filing and checking
the status of requests online. What do
we like best about MyGas? The quick
overview, the time savings and the
all-in-one service.”

A R E L I A B L E A N D
H I G H - Q UA L I T Y
S E R V I C E
F E R N A N D O TO R E L LY
Executive Director,
Sírio Libanês Hospital in
São Paulo, Brazil

“Air Liquide is a valued partner that
supplies our hospital with medical
gases used in emergency services,
operating theatres or intensive care
units. We chose Air Liquide following
a rigorous selection process based
on the high quality of their products
and services and competitive pricing.
In addition to supplying us with gases,
Air Liquide installed the entire gas
distribution system for our building.
The Group aims to develop strategic
partnerships over the long term
and meets the hospital’s expectations
in terms of safety, reliability
and continuity of our operations.”

M E E T I N G
C U S TO M E R N E E D S
I N E X T R E M E
C O N D I T I O N S
S U SA N E L L E R B U S C H
Vice-President of Air Liquide Large
Industries and Electronics activities
in Houston, U.S.

“Hurricane Harvey struck the Texas
and Louisiana coasts in August 2017,
bringing destruction and massive
ﬂooding. A severe test for the region’s
petrochemical and reﬁning industry,
the extreme conditions underlined the
importance of customer-centricity.
With some of our customers forced to
shut down temporarily, we activated our
emergency plan. Key to our response:
open and transparent communication.
Working closely with our customers,
we were able to take needed actions
together to ensure continuity of our
operations and reliability of supply on
which their operations depend.
I especially want to recognize the
solidarity and professionalism of our
teams, who stayed focused on meeting
our customers’ needs and kept safety
top of mind even while many faced
threats to their own homes.”

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STRATEGY EXECUTION

C o n t r i b u t i n g
t o s u s t a i n a b i l i t y

Long-term performance and contributing
to sustainability are at the core of
Air Liquide’s ambition. The Group has
also determined several prerequisites
to action: safety, ethics and the respect
for human rights and the environment.

Group can contribute to a more sustainable
world. This is why local initiatives are
encouraged as part of Air Liquide’s
Corporate Sustainability Program.
The Air Liquide Foundation also contributes
to these through its own projects.

In May 2017, the Board of Directors
created a new committee, the Environment
and Society Committee (ESC) whose
mission is to assess the Group’s strategy
and commitments in terms of sustainable
development and draw up any
relevant recommendations.
The ESC monitors the Group’s
environmental and societal actions.
It focuses in particular on subjects relating
to air quality, energy consumption,
greenhouse gas emissions, and measures
implemented by the Air Liquide Foundation.
The ESC also examines environmental risk
management as well as the quality of the
Group’s reporting in this field.

To contribute to a more sustainable world,
the Group has drawn up a sustainable
development strategy which focuses
on two areas:
1. improve air quality and prevent
global warming;
2. strengthen dialogue with Group
stakeholders.

This strategy is part of the NEOS corporate
program for the 2016-2020 period.
In this context, Air Liquide has been rolling
out a specific Corporate Sustainability
Program (CSP) within the Group to
accompany the creation of solutions to
meet environmental and societal needs:
1. the first focus area is to improve
air quality and to prevent global warming.
Air is a common, vital and universal good.
Its quality is being threatened in many
regions around the world by unbalanced
development, causing public health issues
(heart diseases, strokes, and respiratory
diseases) and exacting a substantial cost,
both human and financial, to society.
The Group prioritizes developing
solutions for a cleaner industry and
cleaner transportation.
2. continuous and extensive dialogue
with its stakeholders is the second
focus area for the Group’s sustainable
development strategy. It is by collaborating
and working together with them that the

F O C U S A R E A 1
By improving
air quality and
preventing global
warming

Solutions
for clean
industry

Solutions
for clean
transport

C O N T R I B U T I N G
T O S U S T A I N A B I L I T Y

Actions
to promote local
development

F O C U S A R E A 2
By strengthening
dialogue with Group
stakeholders

S O L U T I O N S
FO R C L E A N I N D U ST RY

• Contributing to the reduction

of industrial emissions

• Developing products with

a low environmental footprint

S O L U T I O N S
FO R C L E A N T R A N S P O R T

AC T I O N S TO P R O M OT E
LO CA L D E V E LO P M E N T

• Hydrogen energy
• Biomethane
• Multi-energy stations
• Fuel desulfurization

• Extending access to care
• Local subcontracting and procurement
• Subsidiary commitment in local communities
• The Air Liquide Foundation

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19
19

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STRATEGY EXECUTION

C o n t r i b u t i n g t o
s u s t a i n a b i l i t y

These two testimonials illustrate Air Liquide
initiatives to promote local development
and its commitment to a cleaner industry.

S E N S I T I Z I N G
C H I L D R E N
TO S A F E T Y
J U N FA N G PA N
Head of the Tianheng Mingdu
Kindergarten in Shanghai, China

“Volunteer employees from
Air Liquide came to our school
to share their expertise in
the field of safety and raise
awareness with the children,
who were accompanied by
their teachers and parent
representatives. Through
knowledge sharing, experiments and
interactive games, the volunteers
reinforced the importance of safety
in daily activities like riding bikes,
crossing the road or waiting for the
school bus. The session made a great
impression on the children, many
of whom went home and shared
with their parents the importance
of safety. We would like to work with
Air Liquide to continue this innovative
learning program in the future.”

TOWARDS
A CLEANER TRUCK
FLEET IN EUROPE
P H I L I P P E V I E N N OT
Air Liquide Industrial Director,
Industrial Merchant, Europe

“In 2017, we took on a great
adventure. With our external partners
in the supply chain, we set out to move
the majority of our 1,700 trucks in
Europe towards cleaner and quieter
solutions to cut down on pollution and
fine particle emissions. Today, air
quality has become a public health
concern in many metropolitan areas.
To meet this challenge, we must have
adequate infrastructure on a national
and European level and win over a
large number of partners, so we
engaged in an in-depth dialogue
with them. Our local teams have taken
action in Spain notably, where the first
trucks powered by liquefied natural
gas (LNG) are now in use.
The Group’s commitment to clean
mobility as well as our skill set and
regional presence allow us to
contribute to the energy transition.
We are already well on our way!”

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11/04/2018 15:13

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06/04/2018 21:12

STRATEGY EXECUTION

C r e a t i n g v a l u e
o v e r t h e l o n g - t e r m

Air Liquide creates value for the society and the environment,
and to ensure the long-term future of its business. This is the
value creation chain explained here.

O U R S C I E N T I F I C
T E R R I TO RY

The small molecules
essential to life,
matter and energy.

O U R R E S O U R C E S

The three building
blocks of our value
creation chain.

OUR
PREREQUISITES
TO AC T I O N

W H AT W E D O

World leader in gases,
technologies and
services for Industry
and Health.

O U R B U S I N E S S E S

Open to the world, the Group is implementing a customer-
centric transformation strategy throughout its businesses
and geographies.

O U R I M PAC T

Creation of value
over the long-term.

Human capital
• ~65,000 employees
• Diversity of employee profiles
• 29% of women among
managers and professionals
• 3,800 employees
contribute to innovation

Industrial capital
• 2.6 billion euros of investment
decisions made in 2017
• Close to 300 million euros per
year in innovation expenses
• Proprietary technologies
• 442 production units, 24 million
gas cylinders and 13,000 trucks
• Strong presence in industrial
basins

Financial capital
• Long-term customer
contracts
• “A” range credit rating
• Strong balance sheet
• Long-term shareholder base
• Shareholding breakdown:
68% institutional shareholders
and 32% individual
shareholders

Safety

Ethics

Respect
for human
rights

Oxygen

Hydrogen

Nitrogen

Argon

Helium

22
22

energy and
environmental transition

T R A

• Production and
valorization of molecules
• Integration and
commercialization
of proprietary
technologies
• Delivery of services
and digital solutions

T
N
A
H
C
R
E
M
L
A
R
T
S
U
D
N

LARGE IN

RIE

F O R M A TION STR

> 3.5 M

customers
and patients across
a broad diversity
of markets

E
R
A
C
H
T
L
A
E
H

E
C

GINEERING & GLOBAL M A R K E T S
NSTRUCTION
& TECHNO L O G I E S

N IC S

changes in
healthcare

digitization

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ALRA017_GB_22-23_bat5.indd 23

SOCIETY
• Safety as a priority for our employees,
customers, subcontractors and suppliers
• Deployment of the new “Voice of Customer”
program across 30 countries
• Healthcare activity and in particular the fact that
we are taking care of 1.5 million patients at home
• Local development: a presence in
80 countries and dense regional coverage
• Air Liquide Foundation projects
• Assessment of almost 200 suppliers on
subjects such as environment, social,
business ethics and procurement policies.
• 73% of employees attended a training
program at least once during the year

ENVIRONMENT
• >40% of sales relate to solutions
that protect life and the environment
• Close to 60% of Group innovation
expenses contribute to improving
the environmental footprint and healthcare
• 11.5 million tons of CO2 emissions avoided
among Group clients thanks to Air Liquide
solutions
• 69% of electricity consumed by
the Group is low-carbon or renewable
(up 15% over the past five years)

LONG-TERM
PERFORMANCE
• Group Revenue: + 6% (a) average annual
growth over 30 years
• Adjusted net earnings (b) per share: +7.5% (a)
average annual growth over 30 years
• Adjusted dividend (b) per share: +8.6% (a)
average annual growth over 30 years
• 29th free share distribution in 2017

(a)Calculated according to prevailing accounting
rules over 30 years. (b) Adjusted for the 2-for-1 share
split in 2007, for attributions of free shares and for
the capital increase completed in October 2016.

2017 figures

23
23

11/04/2018 15:14

STRATEGY EXECUTION

C r e a t i n g v a l u e
o v e r t h e l o n g - t e r m

Two Air Liquide shareholders share
their views on the Group’s sustainable
performance, and the trust-based
relationship they have with the company.

A P R O F I TA B L E
A N D S U S TA I N A B L E
G R OW T H
R O G E R M O R L E Y

Portfolio Manager, MFS,
United Kingdom

“As loyal Air Liquide shareholders
since 2000, we particularly
appreciate the regularity of its
profit and its generation of
long-term profitable growth.
The Group supplies industries with
gases and services essential to their
activities. Many of the supply
contracts are very long-term, which
provides visibility and regularity in
sales and profit. Air Liquide also
competes in markets where its ability
to innovate stimulates demand for
its products. Whether helping a
refinery to produce in a more clean
and efficient way or delivering
healthcare services that contribute
to patient quality of life, Air Liquide
is providing value for customers and
society. For us, that’s the mark
of a sustainable and viable business
for the long-term.”

E XC E P T I O N A L
C A R E A N D
S E R V I C E
G I S È L E S.
Individual shareholder, France

“I inherited Air Liquide shares
from my mother in 2014; she
had been a shareholder for
over thirty years. I find that
Air Liquide has a long-term vision,
which makes it easier to plan for
the future as a shareholder. That
gives me confidence. In addition,
the Group is really well organized
for its shareholders and offers a
service that you can’t find anywhere
else. At Air Liquide, the atmosphere
is special. The amount of attention
and the high quality of the information
is remarkable. What most tied me
to the Group is when I participated
in the share capital increase in
2016 as part of the purchase of
Airgas. I really felt involved in the
life and future of the Group.”

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In 2017, Air Liquide took a new step of its development and has acquired a new scale with the
successful integration of Airgas. This strengthened the Group’s positions in terms of
geographical presence, especially in the United States, the world’s largest market for industrial
gases. In a more favorable global economic environment, the Group has been successful not
only in achieving a good level of organic sales growth, but also in signing new contracts and
continuing its development of promising new markets. 2017 was marked by significant progress
in customer experience, customer satisfaction and digital transformation. Here are five stories
that illustrate that progress.

Positions
reinforced

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POSITIONS REINFORCED

Successful integration
2017 marks a new step for the Group which
successfully integrated Airgas. The cost synergies
related to this successful integration are achieved
more rapidly than planned. So by the end of 2017,
the total amount of synergies generated since
the acquisition was US$215 million, compared
with the US$175 million initially announced.

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06/04/2018 21:15

ALRA017_GB_28-29_bat4.indd 29

Lamar Davis
Airgas in the United States

06/04/2018 21:15

REINFORCING
OUR LEADERSHIP IN
THE UNITED STATES

A I R G A S

With the acquisition of Airgas

and its successful integration,

Air Liquide has reinforced its position

in the United States, the world’s

largest industrial gases market.

At the same time, the Group strengthened

its position in industrial markets,

customer experience and supply

chain competitiveness.

For example, Airgas has
successfully deployed Air Liquide’s
FLOXAL™ on-site technologies
across its U.S. network. It has
allowed Airgas to meet medium
to large-sized customer needs,
providing them with a supply of
nitrogen, oxygen and hydrogen
on site at their customer locations.
The technology provides
customers with the continuous
and reliable supply they need
to grow their business.

In addition, by leveraging
Air Liquide’s customer base,
Airgas’ product offering is being
introduced in Canada and the
network of retail branches is
being expanded into Mexico.
With the integration of Airgas,
Air Liquide’s Industrial Merchant
Mexico business has grown
significantly over the last
two years.

Customer experience:
bringing it to the next level
The Group also continues to
leverage Airgas’ industry-leading
multi-channel capabilities for
interacting with customers,
including e-business, telesales
and a wide network of more
than 900 retail stores.

Digitization continues to be a major
element of enhanced customer
experience, and solid progress
in that field was made in 2017:
30% of Airgas customers are now
interacting online via Airgas.com
to manage their accounts, track
delivery certificates, locate

The 2016 acquisition

of Airgas allowed
Air Liquide to
strengthen its
presence in the
United States

while rebalancing its positions
in Europe and the United States.

In 2017, focus was made
on completing the integration
of Airgas in the U.S. Its successful
integration resulted in cost
synergies in 2017 ahead of initial
plan. At the same time, Air Liquide
is developing its leadership
across three areas: industrial
markets, customer experience
and supply chain competitiveness.

Industrial markets:
new offers
In combining Airgas’ strong
customer-centric approach
and digital channel expertise
with Air Liquide’s innovation
and culture of safety and
efficiency, the key elements are
in place to accelerate growth
of the Industrial Merchant
activity in the U.S. as well as
in other countries leveraging
the Airgas model.

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or contact their branch, as well
as order products. These good
practices are also being deployed in
Europe with the launch in April 2017
of Mygas.com, Air Liquide’s
European online ordering platform.
Moving towards increased
simplicity in the customer journey,
the Airgas product catalog
has been integrated into some
large customers’ purchasing
systems in order to facilitate rapid
procure-to-pay processes.

Air Liquide also focuses on
expanding customer relationships
with Airgas’ key accounts to explore
new development opportunities
beyond the U.S. and provide
global framework agreements.

SYNERGIES
AHEAD
OF PLAN

End of 2017,

US$215 M

total cumulative synergies since
the acquisition,
including:

US$190 M
cost synergies
Packaged gases activities
Bulk activities
Process and procurement
Administrative
—

US$25 M
sales synergies
Cross-selling
Product availability
Gas applications
On-site offers
—

Objective:
> US$300 M
synergies at
the end of 2019

network in the U.S., reducing
dependence on external sources.

Bulk supply chain distribution
operations were also integrated by
leveraging digital tools. Deliveries
are now managed through a single
company-wide platform, which
coordinates routing and dispatch
activities creating efficiencies
and streamlining processes.

In addition, onboard computer
systems are deployed in the
Airgas truck fleet to significantly
improve administrative efficiency.

Conversely, Air Liquide key
accounts can now benefit from
Airgas’ position and expertise in
the U.S.. For example, a historic
Air Liquide key account, Airbus,
signed a contract with Airgas to
supply its satellite manufacturing
facility located in Florida.

Supply chain: increasing
competitiveness
In terms of supply chain, 2017
marked the completion of the
operational integration of Airgas
and Air Liquide’s packaged gases
and specialty gases activities.

In the bulk gases area, the
strong complementarity of
Airgas and Air Liquide activities
in the U.S. has been a source of
increased competitiveness for the
combined company. Airgas can
now source a larger proportion
of its bulk gases supply from
Air Liquide’s Large Industry

Discover this story
and many more
on airliquide.com

“When you put these two companies’
capabilities together, we have a great
shot at creating the most effective
manufacturer-supplier-distributor
company ever seen in this market space.”

Henry Battle, Airgas Vice President, Materials and Power

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POSITIONS REINFORCED

January 2017
In France, Air Liquide opened a
remote operation and optimization
center that is unique in the industrial
gases sector. Located in Saint-Priest,
near Lyon, it will remotely pilot the
production of 22 Group plants around
the country, adjusting the workflow
of each site in real time to match the
needs of each customer and deliver
greater reliability and optimized
energy consumption.

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06/04/2018 21:16

ALRA017_GB_30-31_bat4.indd 31

Pierre Hoeltgen
Air Liquide in France

06/04/2018 21:16

UNLOCKING
POTENTIAL
THROUGH
DIGITAL

D I G I TA L T R A N S F O R M AT I O N

The Smart and Innovative

Operations (SIO) program, launched

by the Large Industries activity, leverages

the latest digital technologies

to transform the way the Group operates

its production units. This transformation

allows Air Liquide to strengthen

its competitiveness, improve operational

excellence and enhance

customer experience.

D uring 2017, the

SIO program
experienced a
major acceleration
into Air Liquide’s
operations.

Progressively deployed across
the Group, it has already
generated several million euros
of efficiency gains in Large
Industries in its first year.
A major milestone was reached
with the January 2017 opening
of the first remote operation and
optimization center in Saint-Priest,
France, near Lyon, which will
allow remote management for
22 production units in France.

Cost savings are generated
through both improved reliability
and increased efficiency.

For example, predictive analytics
allow incidents to be prevented.
This reshapes the way Air Liquide’s
Large Industries Business Line
addresses its maintenance
strategy, increasing availability
of supply and providing even more
reliability. Likewise, data is used
to build a decision-making tool
used for identifying optimal
operating conditions and providing
the set of adjustments needed
on key parameters to
reach the best economical
point of operation.

Developing experts’ skills
Central to the success of this
digital transformation of operations
are Air Liquide’s people.
The Group is relying on its
industrial experts to design
and create SIO’s digital tools,
in collaboration with Digital
Transformation teams and
external partners such as
start-ups, and then analyze the
resulting data. “People are the
key to every step”, says Large
Industries Human Resources
Director for SIO, Edwige Paquin.
“Digital further strengthens the
expertise of our teams, taking
our decision-making capabilities
to the next level. We apply digital
where it creates maximum value.”

The real-time information
provided through SIO also shifts
the focus from what has occurred
in the past to what is happening
now and in the future.
This contributes to unlocking
the full potential of Air Liquide’s

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The ambition? Leverage the data
collected and offer customers
more flexibility and optionality
throughout the life of the contract.

further enhancing the customer
experience. In addition to helping
reach a new level of excellence
in reliability and efficiency,
the initiative is opening new
possibilities to engage in value
co-creation with customers.
“Digital transformation provides
an opportunity to optimize
our own operations”, says our
customer Dirk Jan De With, Chief
Procurement Officer at Covestro.
“By sharing data and information
throughout our supply chain, we
can truly improve our efficiency.”

In terms of reliability, SIO
delivered a new historic step in
Air Liquide’s reliability performance,
ahead of targets.

Through SIO, Air Liquide also now
works with customers at strategic
levels to co-develop Industry 4.0.

Discover this story
and many more
on airliquide.com

“By integrating and leveraging digital
technologies, we are increasing the reliability,
efficiency and flexibility of supply to
our customers.”

Emmanuel Garnier, Air Liquide SIO Director

teams, enabling needs to be better
anticipated and applying skills and
knowledge where most needed.

The shift is creating new roles in
the Large Industries operations
organization: “real-time pilots” and
“data analysts”. They are located
in new remote operation and
optimization centers to monitor
multiple plants to spot efficiency
gaps, anticipate maintenance
needs and adapt production levels.

Roles are also evolving on
production site with SIO. Remote
monitoring of plant operations

allows more time for value adding
tasks like ensuring the daily
monitoring of equipment and gas
availability, and spending more
time locally with the customer.

Training is deployed to accompany
employees in this transformation,
developing their skills and
competencies. Key priorities for all:
increased agility and an emphasis
on working more collaboratively.

Opening doors to
value co-creation
The transformation of Air Liquide
operations plays a key role in

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POSITIONS REINFORCED

September 2017
Air Liquide rolls out Chronic Care ConnectTM,
its first e-health solution, which serves to
support patients with chronic conditions
remotely, at home, using digital technology.
It provides the personalized daily support
required to deliver effective preventive care
and improve patients’ quality of life.

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06/04/2018 21:16

ALRA017_GB_32-33_bat4.indd 33

06/04/2018 21:16

AT THE HEART
OF CHANGES
IN HEALTHCARE

E - H E A L T H

Healthcare is experiencing a revolution.

Digital technologies have become

an integral part of healthcare,

transforming usages and economic

models in ways that benefit patients

and health professionals alike.

In 2017, Air Liquide launched its first

e-health offer(1), Chronic Care ConnectTM,

thereby delivering an innovative solution

in an environment undergoing important

change. Read on for details.

T he health sector

is facing significant
challenges, in
every country.
Chronic diseases
are becoming

increasingly prevalent as urbanization
spreads, the population ages, and
sedentary lifestyles become more
common. New digital technologies
are allowing patients to be better
informed and take an active role in
their own care. They are also helping
health professionals do their jobs.
Finally, health systems are trying
to define new care models that
will allow them to address these
new challenges while also
controlling health costs.

Connecting patients and
healthcare professionals
E-health offers effective responses
to these changes for all stakeholders
in the healthcare system, specifically
patients, healthcare professionals,
and public health authorities.
France is currently at the leading
edge of this trend with its national
program, ÉTAPES(2), which is aimed
at creating the conditions needed
for making telemedicine a reality.

Launched in 2017, Chronic Care
Connect™, Air Liquide’s first e-health
innovative solution, is part of the
ÉTAPES program. This medical
telemonitoring solution is designed
to provide remote, at-home
assistance to patients with chronic
diseases. This is made possible by
efficiently connecting patients with
healthcare professionals throughout
the patient care journey. Depending

on the doctor’s care plan, the patient
uses the appropriate monitoring
devices (such as a blood pressure
cuff, scale, or blood sugar monitor,
for example) or clinical
questionnaires. Each piece of
equipment is connected to a digital
tablet that lets the patient access
their data and educational materials.
The information is analyzed remotely
and sent to the doctor. At the same
time, Air Liquide’s teams contact
the patient and his or her doctor
on a regular basis. In this context,
data protection is an important issue
and a major focus for Air Liquide.

The benefits of this solution
are threefold. The patient receives
personalized and continuous care
that helps improve his or her quality
of life—all without having to leave
the comfort of home. Doctors have
access to an operational solution
that lets them monitor changes in
their patients’ clinical condition.
For the time being, the solution
targets two chronic pathologies,
diabetes and heart disease.
Finally, by preventing hospitalization,
Chronic Care Connect™ also helps
control healthcare costs.

(1) E-health, also known as digital health, refers to fields in the medical industry that employ digital technologies.

(2) Experiments in telemedicine for improved healthcare pathways (Expérimentations de télémédecine pour l’amélioration
des parcours en santé in French).

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1.5 M

patients worldwide
received at-home care from
Air Liquide in 2017
—

US$136 bn

estimated global value
of the e-health market in 2017(3)

Air Liquide is rolling out its e-health
solution in France and Spain by
providing assistance to the already
substantial number of health
facilities and physicians using
the technology and by increasing
the number of diseases that can
be treated with Chronic Care
Connect™.

Working together to determine
the future of healthcare
For e-health to reach its full potential,
all stakeholders within the
ecosystem must feel the tangible
benefits of its use, and the
distribution of added value must
be balanced. They must therefore
work together to create the
solutions and economic models
of tomorrow. To design Chronic Care
Connect™, Air Liquide collaborated

“With Chronic Care ConnectTM, Air Liquide has reached
a new milestone in moving forward with e-health.
Our solution puts patients at the center of an ecosystem
of healthcare professionals, all of whom are connected
with each other to offer more effective healthcare.”

Grégory Olocco, Vice-President of Markets,
Strategy and Innovation at Air Liquide Healthcare World Business Line

(3) Arthur D. Little, 2016

we know what patients actually
need because we already
work with them on a daily basis.
Our nurses speak with their patients,
listen to them, and help them.
This makes us particularly well
suited to take on the e-health sector.”

A growing sector
After first developing in the United
States, e-health is now spreading
to other regions of the world,
especially Europe. Air Liquide
stands out in this promising market
with an offer that combines human
expertise with digital technology.

with the entire healthcare
ecosystem, harnessing its capacity
for innovation to help patients,
healthcare professionals,
and public authorities.

Air Liquide thereby acts as a
facilitator of treatment and its
monitoring. The Group’s primary
advantage stems from its human
element; indeed, its home
healthcare activity cares for
1.5 million patients throughout
the world.

“This human aspect is absolutely
essential”, explains Grégory Olocco,
Vice-President of Markets, Strategy
and Innovation at Air Liquide
Healthcare World Business Line.
“We have naturally developed highly
advanced expertise in digital
technologies, medicine, and science,
all of which are essential in e-health.
But what really makes the difference
is the human element. That’s what
gives this technology its true
meaning and power. At Air Liquide,

Discover this story
and many more
on airliquide.com

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POSITIONS REINFORCED

2017 was a record year for Air Liquide in the
Asian electronics market. During the year, the
Group signed several new long-term contracts
with major electronics manufacturers in China,
as well as Japan and Singapore. Air Liquide
will invest more than 150 million euros in the
region to supply ultra-pure carrier gases to its
customers’ new fabs.

34
34

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ALRA017_GB_34-35_bat4.indd 35

Ren-Kai Chen
Air Liquide in Taiwan

3535

06/04/2018 21:17

A BIG
PLAYER IN THE
INFINITELY
SMALL

E L E C T R O N I C S

Electronics is at the heart

of the digital transformation that

is profoundly changing the way we live,

work, and communicate. New, ever more

powerful technologies are created every

day at a nanometric scale. In this great

challenge of the infinitely small,

Air Liquide is positioning itself as

a major player by helping leaders

of the electronics industry in the race

to innovate.

It also provides them with the
specialized electronic materials,
analytic services, equipment,
and facilities they need.

Air Liquide also designs and
produces innovative advanced
electronic materials that improve
the connectivity performance and
calculating power of technological
equipment while also limiting
their power consumption. In fact,
100% of all latest generation
smartphones have components,
chips, and memories made with
Air Liquide’s advanced materials.
In seven years, advanced
material families, including those
developed by the Group, have
reduced the size of the transistors
on a smartphone chip from 65
to 10 nanometers. As a result,
phones have a better battery life
(a smartphone battery that could
once last 5 hours can now last
14), are faster and include more
advanced features, leading to a
better customer experience.

Another example is the Group’s
enScribe™ product line. This
new family of advanced etching
materials, developed by the
Group, helps semiconductor
manufacturers meet the

Five major digital

transformation
trends are deeply
impacting everyone’s
usages and
accelerating the

pace of change in the electronics
market. Smart communications in
cities, cars, homes, and more are
growing exponentially, allowing all
connected objects (which are
projected to number 200 billion by
2021(1)) to interact with each other
and with people, especially via
smartphones. The autonomous
car sector is booming and
incorporating increasingly
sophisticated electronics systems.
Augmented reality and virtual
reality are also growing
dramatically, driven by the
development of professional
applications and the healthcare
sector. Big data is a key issue for
storing and processing the
massive amount of information
generated by all these changes.
The effective management of all
this information is allowing the rise
of artificial intelligence, which
represents a major technological
disruption, providing automatic
translation in real time and robot
personal assistants.

A comprehensive and
highly innovative offer
In response to these changes,
Air Liquide is helping leaders in
the electronics industry throughout
the world. The Group supplies
these companies with the high-
purity gases that are essential to
their manufacturing processes.

(1) Source: Intel.

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“Air Liquide is now a world leader in the design,
production, and supply of advanced molecules
and materials for the electronics industry.
The Group is perfectly positioned to take
advantage of this market’s incredible potential
in the years to come.”

Jean-Baptiste Salles, Vice-President Electronics Markets and Customers at Air Liquide

€1,644 M

Air Liquide’s 2017 Electronics
activity revenue
—

100%

of last-generation smartphones
have components, chips and
memories made
with Air Liquide’s advanced
materials.

technological and environmental
challenges facing their sector.
Designed to build a new
generation of memories with
3D technology, the enScribe™
innovative materials can create
new chip architectures using
a deep etching process. In
addition, due to their chemical
structure, these materials
have a shorter lifespan in the
atmosphere, thereby reducing
the impact of the etching
process on the environment.

Flawless quality
Another key challenge in the
sector is the need for impeccable
quality in the product supplied.

technologies, and one-eighth
of all vehicles in circulation
throughout the world will be
connected. As a result of these
major transformations, the
electronics market is booming,
and Air Liquide is well
positioned to capitalize
on its growth potential.

At a nanometric scale,
the slightest imperfection in
the components can have
significant consequences.
Air Liquide has therefore
implemented a specific Quality
Management System for its
Electronics activity. The system
consists of a series of procedures,
tools, and performance indicators
designed to control the quality
of product manufacturing.
Finally, as a critical supplier to the
Electronic industry, Air Liquide
follows the Code of Conduct for
the electronics industry which
was implemented by its main
customers within the Responsible
Business Alliance (RBA).

A powerful lever for growth
In 2020, there will be an average
of 20 connected objects(2)
for each human on earth.
80 million patients(3) will
use connected healthcare

Discover this story
and many more
on airliquide.com

(2) Source: Intel. (3) Source: IBM.

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POSITIONS REINFORCED

December 2017
Air Liquide opens the first public
hydrogen station installed in an airport
zone in France. The new facility is
designed to promote the deployment
of “Hype”, the world’s first hydrogen-
powered taxi fleet, launched by the
start-up STEP in partnership with
Air Liquide. Hype currently operates
more than 70 vehicles, and plans to
grow its taxi fleet to 600 by 2020.

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TOWARDS
A HYDROGEN
SOCIETY

E N E R G Y T R A N S I T I O N

While many regions in the world have

already started to shift towards greener

energy, there are still significant

challenges ahead. Hydrogen is a useful

alternative to help meet these challenges

and provide clean energy. Air Liquide is

present throughout the hydrogen energy

value chain and is actively working to

promote this fuel source on an international

level. The Group made significant progress

in 2017, further strengthening its position

in this highly promising market.

T he commitments

states agreed to
during the United
Nations Climate
Change Conference
(COP21), including

reducing greenhouse gas
emissions in Europe and Japan
by 80% by 2050 and switching
20% of China’s energy supply
to non-fossil fuels by 2030,
indicate the extent of the
challenges ahead. The goals are
clear: moving the energy sector
away from carbon to limit global
warming and reduce atmospheric
pollution to improve air quality.
Air Liquide is convinced that
hydrogen will play an important role
in reaching these two targets and
has invested towards developing
it as a clean energy source.
The Group is a pioneer in this
field and masters the entire
industrial chain, from production,
storage and distribution to use by
the final customer.

Supporting the large-scale
roll-out of hydrogen
Convinced of hydrogen’s potential
and backed by its expertise,
Air Liquide is laying the groundwork
for the advent of a hydrogen-based
society. The year 2017 saw a key
milestone when the Group founded
the Hydrogen Council in partnership
with Toyota. This initiative, the first
of its kind in the world, joins together
over 30 leaders in the transport,
energy, and industrial sectors who
have decided to speak with a single
voice to convince public authorities
and investors of the hydrogen’s

potential with respect to climate
change targets.

Air Liquide and its partners believe
that hydrogen is an essential
pillar in the energy transition.
“Hydrogen, scaling up,” a study
carried out in November 2017 by
the Hydrogen Council with support
from McKinsey, identified five key
markets for hydrogen energy.
Hydrogen is a particularly effective
solution for clean mobility as
hydrogen-powered electric cars
do not emit any greenhouse gases
or particles and do not make any
noise. Hydrogen could fuel 10 to
15 million cars and 500,000 trucks
by 2030. In addition, the electricity
produced by wind turbines and
solar panels – intermittent by nature
– can be converted into hydrogen.
Hydrogen can be easily stored,
meaning the energy could be used
whenever demand increases.
This is a significant advantage that
can help support the large-scale
production of renewable energies.
Overall, according to the study,
hydrogen could contribute to up
to 20% of CO2 emissions reduction
targets by 2050 (if global warming
is capped at 2°C).

Developing infrastructure
and solutions for the future
Air Liquide is turning these
prospects into reality. In 2017,
the Group continued to build
hydrogen stations. For example,
it has designed and installed two
stations in Japan, nine in Germany
and the first hydrogen station in
the United Arab Emirates in Dubai.

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“Our innovative projects, including mobility
solutions for individuals, refueling stations
for buses, and programs aimed at forklift fleets
and company fleets, position us as a leader
in the development of hydrogen energy on
a global scale.”

Pierre-Étienne Franc, Hydrogen Energy World Business Unit Director

France’s first station in an airport
zone was built in 2017 at Paris-Orly
Airport. Another success is the
Anaheim station located in California
which completed 1,000 hydrogen
fuel cell vehicle fill-ups after just
100 days in operation in early 2017.

In terms of local municipalities,
the Group delivered in 2017 a
charging station in Oslo, Norway,
to fuel five buses owned by
a local transportation company.
In the private sector in Canada,
Air Liquide supplies four hydrogen
stations that fuel the fleet of over
800 forklifts owned by the retail
distribution group Walmart.

Towards carbon-free hydrogen
For hydrogen to live up to its
full potential and foster energy
transition, production will have to
increase significantly and costs
will have to be greatly reduced.
Another key factor will be to
gradually increase the share of
carbon-free hydrogen produced
globally. With its Blue Hydrogen
program, Air Liquide is working to
gradually phase out carbon from
the hydrogen it produces for energy
purposes. Concretely, Air Liquide
has committed to producing at least
50% of the hydrogen needed for
these applications without emitting
any CO2 by 2020.

The Group uses several innovative
solutions dedicated to reducing CO2
emissions resulting from hydrogen
production: Cryocap™, for example,
is a cryogenic solution that captures
and recycles the CO2 that is emitted
when hydrogen is produced from
natural gas. Hydrogen can also be
produced without carbon through
water electrolysis: Air Liquide
developed a large-scale production
process in Denmark that uses
renewable forms of energy such as
wind power. Finally, biogas reforming
technology allows Air Liquide to
produce hydrogen from biomethane,
itself produced from biogas, which is
also a renewable form of energy.

HYDROGEN
BY 2050(2) :
could contribute to

20%

of CO2 emissions
reduction targets
—
generate

US$2.5 tn

of business
—
and could create

30 Mjobs throughout

the world
—

Discover this story
and many more
on airliquide.com
and ﬁnd out more
about cH2ange
on Facebook,
Medium,
Twitter and Youtube.

(2) Source: Hydrogen, scaling up.

cH2ange is an initiative supported by
the Air Liquide group to foster dialogue
around the role hydrogen can play in the
energy transition on social media.

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In 2017, Air Liquide has acquired a new scale, with annual sales surpassing 20 billion euros. All
Gas & Services activities grew in 2017, in particular Industrial Merchant, which accounts for nearly
half of the revenue. The Group’s operating performance is improving, with high efficiency gains
globally and synergies related to Airgas ahead of our forecast that contribute to the increase in
the operating margin and to higher net profit. The balance sheet is strong, with the high level of
cash flow making a significant contribution to lowering debt.

2017
performance

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2017 PERFORMANCE

K e y f i n a n c i a l f i g u r e s
f o r 2 017

REVENUE

NET PROFIT
(Group share)

CASH-FLOW

€20,349 M €2,200 M €4,254 M

€292 M

innovation expenses in 2017

Net Profit recurring
€2,029 M (1)

(1) Excluding the non-cash impacts of exceptional items
and the U.S. tax reform.

EFFICIENCIES

€323 M

GROUP REVENUE
(in millions of euros)

TOTAL CUMULATIVE AIRGAS
SYNERGIES SINCE THE ACQUISITION
(at year-end 2017)

US$215 M

GAS & SERVICES REVENUE
BY WORLD BUSINESS LINE
(in millions of euros)

19,642

335

372

9,261

5,336

3,401

1,644

G R O U P S H A R E H O L D I N G
(as of December 31, 2017)

410,000

individual shareholders

s
a
G

s
e
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v
r
e
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&

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i
r
e
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&

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e
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r
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ALRA017_GB_40-43_bat4.indd 41

a
u
d
v
d
n

s
r
e
d
o
h
e
r
a
h
s

INNOVATION

€130 M

invested in our R&D centers
over 3 years

GAS & SERVICES REVENUE
BY GEOGRAPHY

>100

start-ups work with the Group

41%

35%

21%

s
a
c
i
r
e
m
A

e
p
o
r
u
E

c
fi
c
a
P
-
a
s
A

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c
i
r
f
A
d
n
a

t
s
a
E
e
d
d
M

€2.65

dividend per share proposed at
the May 16, 2018 Annual General
Shareholders’ Meeting, a +12.4%
increase taking into account the
October 2017 attribution of 1 free
share for every 10 shares held.

06/04/2018 21:20

2017 PERFORMANCE

K e y n o n - f i n a n c i a l
f i g u r e s f o r 2 017

GLOBAL PRESENCE

ENVIRONMENT

countries

SAFETY

1.6

Lost-time accident
frequency rate per million
hours worked

DIVERSITY

29%

of women among managers
and professionals

n
o

i
l
l
i

m
5
3
>

s
r
e
m
o
t
s
u
c

s
t
n
e
i
t
a
p
d
n
a

g
n
d
u
c
n

s
r
e
m
o
t
s
u
c

s
a
g
r
i
A
n
o

i
l
l
i

>3.5 million

customers
and patients

~65,000
employees

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ALRA017_GB_40-43_bat4.indd 43

C o m p a ny
P r o g r a m
o b j e c t i v e s
2 0 1 6 -2 02 0

Air Liquide is implementing its
NEOS Company Program to reach its
objectives for the period 2016-2020.
This program enables the Group to
deliver long-term performance,
to be connected to its stakeholders
and innovative. All the NEOS initiatives
were launched in 2017.

CLOSE TO

60%

of Group innovation expenses are related to projects that
contribute to reducing environmental impact and improving
air quality and healthcare.

PERFORMANCE
+6 to 8%(a)

CAGR

CLOSE TO

30%

of Group innovation expenses are devoted to reducing
CO2 emissions (by reducing the carbon content of its own
products or those of its customers).

MORE THAN

40%

Many applications of industrial and medical gases protect
the environment for Group customers and the lives of its patients.
These applications represent more than 40%
of Group revenue.

efficiency gains on average per year

revenue growth

>€300 M (b)
>US$300 M
>10%

Airgas synergies

ROCE after 5 to 6 years

Maintaining rating from S&P
“A” range

(a) Including Airgas consolidation scope effect in 2017,
corresponding to a +2% CAGR.
(b) For the period 2017-2020.

RESPONSIBILITY
Improve air quality and
prevent global warming.
Strengthen dialogue
with Group stakeholders.

06/04/2018 21:20

2017 PERFORMANCE

2 017
A i r L i q u i d e n e w s

3D printing

MX3D

3D-printed bridge in
Amsterdam

A new-generation bridge will see the
light of day in 2018, in Amsterdam’s
historic downtown district. A true
technological feat, the bridge will
be constructed using an innovative
additive manufacturing process.
A robotic arc welding machine will
build the bridge in real time without
human intervention, using 3D printing
technology. Air Liquide is supporting
the design firm Joris Laarman Lab
by providing its expertise for the
research and development phase,
gas supply and arc welding.
This is a significant contribution to
a project foreshadowing a profound
transformation in the way industrial
objects will be manufactured in
the future.

Energy transition

1st

Hydrogen Council
launched in Davos

January 2017 was marked by the
creation of the Hydrogen Council,
currently composed of more than
30 companies from energy,
transport, and industry sectors.
The goal of this global initiative is
to voice a united vision and
long-term ambition for hydrogen
to foster the energy transition and
reach climate change targets.
In concrete terms, the Council
provides recommendations to a
number of key stakeholders such
as policy makers, business players,
international agencies and civil
society. A preliminary study called
“Hydrogen Scaling Up” offers a
precise and comprehensive road
map regarding the roll-out of
hydrogen and the key role it plays
in the energy transition.

Open innovation

start-ups together
with Air Liquide at the CES
in Las Vegas

January 2017: Air Liquide
participated for the first time
in the Las Vegas Consumer
Electronics Show (CES), a key trade
show featuring innovative products
in the electronics industry.
The Group came along with five
partnering start-ups: Diota, Imag’ing,
Speachme, TAMR, and Ubleam.
With Ubleam, which specializes
in the Internet of Things, Air Liquide
is co-developing in particular
a tagging technology that transforms
gas cylinders into connected
objects. Customers can scan
the logo on the cylinder to instantly
access a wide variety of useful
information on their smartphones.

Healthcare

First Oxygen House
inaugurated by Air Liquide
in Senegal

The new Oxygen House is the
dedicated location for the Access
Oxygen offer, which aims to
provide medical oxygen to small,
local health centers. In the Thiès
region, over 140 health structures
provide a population of over
1.4 million inhabitants, including
the poorest, with local access
to healthcare and medication.
Oxygen House now provides
them with access to medical
oxygen, which is crucial in
treating a wide variety of
pathologies. Access Oxygen
is a comprehensive offer that
includes all the necessary
equipment, services and training
for providing oxygen therapy
treatments. Access Oxygen will
ultimately be available throughout
Senegal.

Space

Ariane 6

New contract for
the future launcher

A long-time partner of the European
space program, Air Liquide
continues to provide cryogenics
expertise for the development of
the future Ariane 6 launch vehicle.
The Group was selected to design,
produce, and install the flexible
transfer lines that will be used
to refuel the launch vehicle with
cryogenic propellant on the
ground, right up until the very last
moment before the launch. This
agreement comes on top of the
contracts signed by Air Liquide
at the end of 2016, and is part of
a full range of high-tech on-board
and ground equipment, gases
and related services developed
by the Group. The countdown
to Ariane 6’s first flight in 2020
has begun!

Discover the stories
around these highlights
in the Air Liquide group magazine:
airliquide.com/magazine

Investment

€40 M

invested by the new
joint venture with Sinopec
in China

Sinopec is one of the largest
integrated energy and chemical
companies in China. Air Liquide
and Sinopec, which have been
partners since 2007, strengthened
their relationship in 2017 by
creating a new joint venture.
Its role is to take over and optimize
three existing Air Separation
Units (ASUs), and build a new
nitrogen production unit for a total
investment of 40 million euros.
At the same time, Air Liquide
commissioned a new state-of-
the-art ASU to supply Sinopec
with oxygen and nitrogen
in South China.

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2017 PERFORMANCE

Large Industries

€50 M

investment for
a hydrogen production
unit in Mexico

Air Liquide signed a long-
term agreement with Pemex
Transformación Industrial, a
subsidiary of the state-owned
oil and gas company Petróleos
Mexicanos (PEMEX). The Group
was selected to supply hydrogen
to PEMEX’s refinery located in the
Mexican city of Tula de Allende.
To do so, Air Liquide Mexico
will invest 50 million euros for
the takeover and optimisation
of PEMEX’s existing hydrogen
production unit (SMR(1)).
The SMR will provide the Tula
refinery with 90,000 Nm3 per
hour of hydrogen , which will help
produce cleaner transportation
fuels. This agreement will also
allow Air Liquide to strengthen its
presence in central Mexico.

(1) Steam Methane Reformer.

Awards

“Gold Performance
Excellence Award” given
to Airgas by Boeing

Boeing awarded Airgas with this
prize in recognition of the company’s
high level of performance.
The award is a testament to the
more than 25 years of successful
collaboration between the two
companies. Airgas supplies Boeing
with industrial gases, welding
hardgoods, personal protection
and safety equipment, and dry ice,
providing a key contribution to
many strategic projects.

Hydrogen energy

1st

energy self-sufficient
hydrogen vessel in the world

Energy Observer is an
experimental catamaran that is
making a 6-year world tour across
fifty different countries. This unique
vessel is powered by hydrogen
and renewable energies. It is
energy self-sufficient and doesn’t
emit greenhouse gases or fine
particles. With more than 20 years
of experience in the development
of hydrogen energy, Air Liquide
supports this one-of-a-kind project
that demonstrates the crucial
role hydrogen plays in the energy
transition.

Discover the stories
around these highlights
in the Air Liquide group magazine:
airliquide.com/magazine

Electronics

€150 M

investment decision in
electronics to support new
clients in Asia

In the Asian electronics market,
2017 was a record year for
Air Liquide. The Group signed
several new long-term contracts
with major electronics
manufacturers in China, as well as
Japan and Singapore. Air Liquide
will invest more than 150 million
euros to supply ultra-pure carrier
gases, which play a key role
in the cutting-edge semiconductor
industry, to its customers’ new fabs.
In addition, the demand for
Air Liquide’s advanced materials
continued to grow in the
Asia-Pacific region, notably in
China, South Korea and Japan.

Healthcare

2 healthcare acquisitions in

Japan and Saudi Arabia

In Japan, the acquisition of
Sogo Sangyo Kabushiki Kaisha,
a major home healthcare and
medical gases company, has
allowed Air Liquide to strengthen
its healthcare presence in the
country and increased the number
of patients served at home by the
Group to 20,000. In Saudi Arabia,
where the healthcare sector holds
significant potential, Air Liquide
has announced that it purchased
a majority equity stake (60%)
in the Respiratory division of
Thimar Al Jazirah Company (TAC).
TAC is a major pharmaceutical,
medical, and dental player within
Saudi Arabia. With this purchase,
the Group will be able to enter
the home healthcare market
in Saudi Arabia, serving over
1,400 patients.

Open innovation

8new ALIAD investments

in 2017

ALIAD, Air Liquide’s venture
capital investor, is continuing
to invest in technology start-ups.
Since its creation in 2013, 80
million euros have been invested.
In 2017, ALIAD increased its
financial commitment in six
companies and carried out eight
new investments. Ubleam, a
French start-up specialized in the
Internet of Things, is one of the
companies singled out by ALIAD.
ALIAD also invested in Dietsensor,
which created an application
that helps diabetics track the
glucose levels of their meals,
and in Diabeloop, a start-up which
is developing an electronic
synthetic pancreas that can
automatically deliver insulin based
on a patient’s needs.

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4747

06/04/2018 21:21

2017 PERFORMANCE

C o n s o l i d a t e d i n c o m e
s t a t e m e n t ( s u m m a r i z e d )

C o n s o l i d a t e d
b a l a n c e s h e e t ( s u m m a r i z e d )

F o r t h e y e a r e n d e d D e c e m b e r 3 1

(in millions of euros)

2016

2017

ASSET S (in millions of euros)

December 31, 2016

December 31, 2017

Revenue

Purchases

Personnel expenses

Other income and expenses

Operating income recurring before depreciation and amortization

Depreciation and amortization expense

Operating income recurring

Other non-recurring operating income and expenses

Operating income

Net finance costs

Other financial income and expenses

Income taxes

Share of profit of associates

NET PROFIT FROM CONTINUING OPERATIONS

NET PROFIT FROM DISCONTINUED OPERATIONS

PROFIT FOR THE PERIOD

- Minority interests

- Net profit (Group share)

Basic earnings per share (in euros)

Diluted earnings per share (in euros)

Basic earnings per share from continuing operations (in euros)

Diluted earnings per share from continuing operations (in euros)

Basic earnings per share from discontinued operations (in euros)

Diluted earnings per share from discontinued operations (in euros)

18,135

-6,693

-3,659

-3,172

4,611

-1,587

3,024

3,060

-389

-14

-747

1,916

1,927

1,844

4.64

4.62

4.61

4.60

0.03

0.02

20,349

-7,721

-4,138

-3,348

5,142

-1,778

3,364

-344

3,020

-421

-68

-207

2,329

-37

2,292

2,200

5.16

5.14

5.25

5.22

-0.09

-0.08

Net Profit
Net Profit
recurring: (1)
recurring: (1)
€2,029 M
€2,029 M

Goodwill

Other intangible assets and property, plant and equipment

Other non-current assets (a)

TOTAL NON-CURRENT ASSETS

Inventories and work-in-progress

Trade receivables and other current assets

Cash and cash equivalents (a)

TOTAL CURRENT ASSETS

ASSETS HELD FOR SALE

TOTAL ASSETS

13,890

22,003

960

36,853

1,323

4,090

1,576

6,989

276

44,118

12,840

20,137

1,059

34,036

1,334

3,963

1,694

6,991

41,027

EQUIT Y AND LIABILITIES (in millions of euros)

December 31, 2016

December 31, 2017

Shareholders' equity

Minority interests

TOTAL EQUITY

Provisions and deferred taxes

Non-current borrowings

Other non-current liabilities (a)

TOTAL NON-CURRENT LIABILITIES

Provisions

Trade payables and other current liabilities

Current borrowings (a)

TOTAL CURRENT LIABILITIES

LIABILITIES HELD FOR SALE

TOTAL EQUITY AND LIABILITIES

16,742

383

17,125

4,971

14,890

504

20,365

280

4,103

2,064

6,447

181

44,118

16,318

400

16,718

4,401

12,522

241

17,164

333

4,264

2,548

7,145

41,027

(1) Excluding the non-cash impacts of exceptional items and the US tax reform.

(a) Included derivatives.

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2017 PERFORMANCE

C o n t e n t s

C o n s o l i d a t e d
c a s h f l o w s t a t e m e n t

F o r t h e y e a r e n d e d D e c e m b e r 3 1

EDITORIAL
Benoît Potier, Chairman and CEO

(in millions of euros)

BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

Operating activities

Cash flows from operating activities before changes in working capital

Changes in working capital

STRATEGY EXECUTION

Others

A CUSTOMER-CENTRIC
Net cash flows from operating activities
TRANSFORMATION STRATEGY

Investing activities

Purchase of property, plant and equipment and intangible assets

CONTRIBUTING TO SUSTAINABILITY

Acquisition of subsidiaries and financial assets

CREATING VALUE OVER THE LONG-TERM

Proceeds from sale of property, plant and equipment and intangible assets
and financial assets

Net cash flows used in investing activities

POSITIONS REINFORCED

Financing activities

Dividends paid

• L’Air Liquide S.A.

REINFORCING OUR LEADERSHIP
IN THE UNITED STATES

• Minority interests

UNLOCKING POTENTIAL THROUGH DIGITAL

Proceeds from issues of shares

Purchase of treasury shares

AT THE HEART OF CHANGES
IN HEALTHCARE

Transactions with minority shareholders

A BIG PLAYER IN THE INFINITELY SMALL

Net cash flows used in financing activities excluding
increase (decrease) in borrowings

TOWARDS A HYDROGEN SOCIETY

Effect of exchange rate changes, opening net indebtedness
of newly acquired companies and others
2017 PERFORMANCE

Change in net indebtedness

NET INDEBTEDNESS AT THE BEGINNING OF THE PERIOD

KEY FIGURES FOR 2017
NET INDEBTEDNESS AT THE END OF THE PERIOD

2017 AIR LIQUIDE NEWS

FINANCIAL INFORMATION

Discover the Group at airliquide.com
and on social media: Twitter, Facebook
and LinkedIn

2016

2017

3,523

331

-158

3,696

-2,259

-12,165

830

-13,594

-947

-72

3,361

-14

2,332

-563

-8,129

-7,239

-15,368

4,133

188

-67

4,254

-2,183

-140

477

-1,846

-1,031

-68

-158

-4

-1,191

780

1,997

-15,368

-13,371

I N T E R N E T
See our annual publications:
Annual Report, Reference Document,
Shareholder’s Guide, Interactions, and more.
www.airliquide.com

Y O U T U B E
Air Liquide Corp Channel

T W I T T E R
@AirLiquideGroup

L I N K E D I N
linkedin.com/company/airliquide

Published by the Communications department of the Air Liquide group, April 2018
75 quai d’Orsay, 75007 Paris, France

Design & Production:

(ref.: ALRA017)

L’Air Liquide - S.A. company established for the study and application of processes developed by Georges Claude
with issued capital of 2,356,439,277.50 euros

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P o s i t i o n s

r e i n f o r c e d

#GEOGRAPHIES #MARKETS #DIGITAL

2 0 1 7

A N N U A L R E P O R T

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