L'Air Liquide S.A. Annual Report 2021

Plain-text annual report

A world leader in gases, technologies and services for industry and health, Air Liquide is present in 75 countries with around 66,400 employees and serves over 3.8 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. 2021 Annual Report At the heart of the future 00_ALRA2021-RA_GB_couv_bat2.indd 1-3 25/03/2022 18:15 Arnaud, employee at Air Liquide France Industrie At the heart 04 14 Interview with Benoît Potier, Chairman and CEO At the heart of the future for a more sustainable world 08 Strategic plan 10 Governance 54 At the heart of the future acting in conﬁdence with and for all 70 Performance A I R L I Q U I D E .C O M See our annual publications on our website: Annual Report, Sustainability Report, Universal Registration Document, Shareholder’s Guide, Interactions. YO U T U B E L I N K E D I N T W I T T E R Air Liquide Corp channel linkedin.com/company/airliquide @AirLiquideGroup Complimentary copy. Published by the Communications department of the Air Liquide Group, 75 quai d’Orsay, 75007 Paris, France Publication Director: Benoît Potier. Editor: Alexandra Rocca. Date of publication and legal deposit: March 2022. ISSN: 2803-6220. Photo credits: in order of appearance, p. 1: Julien Lutt/Capa Pictures, p. 2-3: Energy Observer Productions/Antoine Drancey, p. 4: Antoine Doyen, p. 6: François Roelants, p. 9: Gorodenkoff/Getty Images – Wayne Eastep/Getty Images – Sinology/Getty Images – Betsie Van Der Meer/Getty Images, p. 11: Antoine Doyen – Julien Lutt/Capa Pictures – Carlos Crespo/Capa Pictures – Olga Kolleeny/ Capa Pictures – Laurent Attias, p. 12: Franck Juery, p. 13: Franck Juery – Mourad Mokrani – Terry Halsey, p. 14-15: Tim Robberts/Getty Images, p. 18: Mourad Mokrani, p. 19: Air Liquide, p. 20: Adrien Daste – Sasol, p. 21: Air Liquide – Bertrand Holsnyder, p. 22: Olive/Getty Images, p. 23: Eternity in an Instant/Getty Images – Bim/Getty Images, p. 26: Julien Lutt/Capa Pictures, p. 27: Julien Lutt/Capa Pictures, p. 28: Adrien Daste – portishead1/Getty Image, p. 29: Sophie Loubaton/Capa Pictures – vgajic/Getty Images, p. 30: Pyrosky/ Getty Images, p. 31: BirdHunter591/Getty Images – Adrien Daste, p. 34: Christopher Jue/Capa Pictures, p. 35: David Wang/Air Liquide, p. 36: Adrien Daste, p. 37: Narumon Bowonkitwanchai/Getty Images – Philippe Roy/Getty Images, p. 38: Artur Debat/Getty Images, p. 39: Bloom Productions – Adrien Daste, p. 42: Mourad Mokrani, p. 43: Aaron Auyeung, p. 44: tomasworks/Getty Images – Pau Hana Productions, p. 45: jonathanﬁlskov-photography/Getty Images – AzmanJaka/Getty Images, p. 46: Maskot/Getty Images, p. 47: Thijs Wolzak – d3sign/Getty Images, p. 48-49: Amparo García/EyeEm/Getty Images, p. 50: Olivier Guia/CryoConcept, p. 51: Akiromaru/ Getty Images, p. 52: Eduard Muzhevskyi/Science Photo Library/Getty Images, p. 53: South_agency/Getty Images, p. 54-55: Franck Benausse/Le Square, p. 56: Arnaldo Kikuti, p. 58: Yann Manac’h/Capa Pictures, p. 62: Hervé Gousse, p. 64: Laurent Cipriani/Capa Pictures, p. 66: Thomas Hensinger/Solar Impulse Foundation, p. 68: Gianfranco Tripodo/Capa Pictures, p. 75: Adrien Daste – Air Liquide – Sanjeri – Olivier Fernandez/IStock – Thomas Cortesi – Alexandre Aldavert. Design and production: (ref.: ALRA021) Printers: FOT Imprimeurs. This document is printed on FSC-certiﬁed paper sourced from sustainably managed forests by an Imprim’Vert-certiﬁed printer. L’Air Liquide - S.A. company established for the study and application of processes developed by Georges Claude with issued capital of 2,614,100,703.50 euros. 00_ALRA2021-RA_GB_couv_bat4.indd 4-6 28/03/2022 11:58 Air Liquide’s ambition is to contribute to a more sustainable world. Our growth model is based on a principle of global performance that combines economic performance with sustainable development. For us, being at the heart of the future means creating and developing innovative solutions that are based on technology and scientific expertise to support industry and healthcare in their march towards progress. It means acting on a daily basis for our customers, our patients and, beyond that, being useful to society as a whole. of the future Energy Observer, catamaran powered by hydrogen and renewable energies Air Liquide 01_ALRA2021-RA_GB_bat4.indd 3 28/03/2022 11:59 Interview Interview 4 01_ALRA2021-RA_GB_bat2.indd 4 25/03/2022 18:19 Interview with Benoît Potier Chairman and CEO of Air Liquide The year 2021 was characterized by the Covid-19 pandemic, inflation and a sharp rise in energy prices. How would you describe Air Liquide’s performance? First of all, I would like to say a few words about the beginning of 2022, which has been so painfully marked by the conﬂict in Ukraine. My thoughts are naturally with our 14 employees who are still based there and we are monitoring their situation closely. Their safety is a constant concern. I am also thinking of the millions of refugees, mainly women and children, forced to ﬂee their country. Faced with this real tragedy, the Group is organizing itself to contribute humanitarian aid, notably through the Air Liquide Foundation, but also through local initiatives, notably in Poland and Romania. As for our performance in 2021, I would say that it was a very good year, given the complex environment in which we were operating. Indeed, we stepped up to the plate on all fronts. Throughout the world, Air Liquide teams demonstrated an incredible ability to both react and adapt to many challenges, whether in response to the Covid-19 crisis, the signiﬁcant acceleration in inﬂation or the energy transition challenge. The Group’s resilience was thoroughly tested in 2021 and our success is due to our 66,400 employees who give their all to our customers and patients on a daily basis. I would like to give them my heartfelt thanks and once again express my great pride in them. Could you tell us more regarding the Group’s financial performance? In 2021, Air Liquide delivered another year of proﬁtable growth. The Group posted an 8.2%(1) increase in sales to reach 23.3 billion euros in revenue, and a 13.3%(2) increase in recurring net profit. Growth was achieved across all activities, with Engineering & Construction and Global Markets & Technologies beneﬁting from projects relating to the energy transition. In the Gas & Services activity, which represents 95% of Group revenue, growth in all business lines and geographical areas was up signiﬁcantly, particularly in Asia (+6%), Europe (+7%) and the Americas (+8%). Our operating margin is increasing thanks to an inﬂation-adapted pricing policy, high efficiency gains reaching 430 million euros and strong business portfolio management. Amid a landscape of high energy prices, the Group was able to counter rising costs thanks to our strong business model. Finally, 2021 saw a high volume of investments that reached 3.6 billion euros. The Group’s ﬁnancial performance in 2021 was truly exceptional. 5 “Our global presence, our inventor DNA and the soundness of our business model enable us to play a decisive role in the markets that will unlock the future.” (1) On a comparable basis (2) Excluding currency impact Air Liquide 01_ALRA2021-RA_GB_bat5.indd 5 28/03/2022 17:27 6 François Jackow François Jackow joined the Group in 1993 and has held a wide range of responsibilities throughout his international career. In 2002, he was in charge of Innovation, before being appointed Chairman and CEO of Air Liquide Japan in 2007, then Group Vice President of the Large Industries business line in 2011. In 2014, he joined the Executive Committee and was appointed the Group’s Vice President of Strategy. In 2019, he became Executive Vice President, notably supervising the Europe Industries, Europe Healthcare and Africa/ Middle East/India hubs. François Jackow is French and has a scientific and managerial education, having studied in France and the United States. A graduate of the Paris-based École Normale Supérieure, he also holds a Masters degree in Chemistry from Harvard University in the United States and an MBA from the Collège des Ingénieurs. In March 2021, Air Liquide announced ambitious sustainable development objectives. What has that changed for the Group? These objectives represent an in-depth evolution of our business model. Our performance must not only take into account the interests of our employees, customers and shareholders, but also those of society as a whole. With these objectives, we have set out a very clear road map in terms of sustainable development. The Group is focused on global performance, which combines ﬁnancial and extra-ﬁnancial performance and now includes environmental, social and governance indicators. Decarbonization is a key focus of your commitments. What are the key drivers in this field? In practical terms, we have targeted two major areas of action to ﬁght global warming. The ﬁrst is to decarbonize industry. We are a leading player in this pursuit thanks to our wide range of technologies based on hydrogen, carbon capture and storage and biomethane. We implement these solutions for our customers, allowing them to signiﬁcantly reduce their CO2 emissions. We are also working to decarbonize our own operations through numerous initiatives, from the purchase of renewable energy - as we’ve done in the Netherlands and in Belgium - to the construction of more energy-efficient production plants that emit less CO2. Our goal is to reduce our CO2 emissions by 33% by 2035 and to become carbon neutral by 2050. Our second area of action is closely linked to the ﬁrst, and is of course hydrogen, a major lever of the energy transition. In terms of hydrogen, what are your major accomplishments? There are so many, and we are extremely proud of them. These days, many companies are interested in hydrogen and its adoption is rapidly gaining momentum in the industrial and heavy transport sectors. We have already signed several partnerships with major global industrial brands in these domains, a sign of how our technologies have reached maturity. In the past four years, we have multiplied our annual expenditure on hydrogen technologies by a factor of 20, and the number of our employees working in this ﬁeld has increased tenfold. And this is just the beginning; the outlook 01_ALRA2021-RA_GB_bat5.indd 6 28/03/2022 17:27 “The Group is focused on global performance. ... Growth only makes sense if it has a positive impact on the environment and society at large.” are true assets. For over 120 years, Air Liquide has ceaselessly cultivated its key strength: the ability to perceive and even anticipate the profound changes impacting society, and to offer the necessary expertise. We are also at a real turning point in the Group’s history. Despite the current uncertain environment, I remain conﬁdent in Air Liquide’s ability to face the challenges ahead. The opportunities for Air Liquide remain numerous. Our international presence, inventor DNA, technological expertise and the diversity of our business, supported by the strength of our model, will enable the continuation of our growth trajectory. We are having a truly decisive impact on the markets that are essential for the future: hydrogen, of course, which is part of a rapidly changing energy world, but also healthcare, electronics and high technologies. Few companies have such a wide range. We are pleased to be able to act in so many markets. 7 is extremely promising. By 2035, we will invest 8 billion euros in the low-carbon hydrogen value chain, with the goal of tripling sales from 2 billion to 6 billion euros in the same time frame. On a more personal note, 2022 is a milestone year for you, with the announcement of a new governance organization and the launch of a new strategic plan. Indeed, on June 1, 2022, François Jackow will succeed me as Chief Executive Officer. I will remain Chairman of the Board of Directors, a role that I am familiar with, having already held it for around 15 years. We have planned this transition carefully with the entire Board of Directors, and I have complete faith in François, his leadership qualities, his experience and his unrivaled knowledge of the Group. I am conﬁdent that he will continue, in tandem with the Executive Committee team, the transformations that are already underway and will take them even further, notably through our new 2025 Strategic plan, ADVANCE. Announced on March 22, 2022, this plan marks an important step for the Group as we embark on a path of global performance that combines both ﬁnancial and extra-ﬁnancial indicators. We are convinced that growth only makes sense if it has a positive impact on the environment and society at large. Building the future means being ﬁnancially efficient, ensuring continuity and the ability to invest in the future, acting as a leader of industry decarbonization, promoting progress through technological innovation and acting for everyone. What is your vision for the Group’s future? We are at a very singular moment in the history of the world, marked by geopolitical, economic and environmental upheavals. The last two years have profoundly transformed our societies, and we have all lived it ﬁrst-hand. More recently, the war in Ukraine and the terrible humanitarian and economic consequences that stem from it have changed the geopolitical situation and shaken up the world order. Despite these challenges, I think that the world must continue to move forward, and that we must always believe in the future and build it with conviction. From the Group’s point of view, our resilience and our capacity to adapt Air Liquide 01_ALRA2021-RA_GB_bat5.indd 7 28/03/2022 17:28 ADVANCE, the 2025 strategic plan 8 Delivering strong financial performance Air Liquide is taking action today while preparing the future. The Group is rising up to an ambitious challenge: continuing its growth dynamic and improving proﬁtability all while meeting its commitments to reduce CO2 emissions and investing in the markets of the future. Decarbonizing Decarbonizing the planet the planet The Group is affirming its leading role in the decarbonization of industry and the dawn of a low-carbon society in which hydrogen is today playing a decisive role. It is committed to decarbonizing its own operations while helping customers to do the same. Air Liquide plans to reach carbon neutrality by 2050, with the intermediate step of beginning to reduce its CO2 emissions around 2025. Our objectives +5% to +6% AV E R A G E A N N U A L S A L E S G R O W T H ( 1 ) +10% R O C E F R O M 2 0 2 3 I N I T I AT I N G T H E reduction O F C O 2 E M I S S I O N S A R O U N D 2 0 2 5 (1) Compound annual growth rate (CAGR) of sales on a comparable basis over the 2021-2025 period. (2) Sum of annual operating margin improvements in basis points, excluding energy pass-through impact. (3) Industrial investment decisions above 5 million euros. 02_ALRA2021-RA&AC_GB_bat4.indd 8 28/03/2022 12:06 ADVANCE, Air Liquide’s new strategic plan for 2025, is a milestone in the company’s history. It places sustainable development at the heart of the Group’s strategy, firmly setting Air Liquide on course for global performance by combining financial and extra-financial performance. ADVANCE is structured around four priorities and integrates the Group’s Sustainable Development objectives. 9 Unlocking progress Unlocking progress via technology via technology Thanks to its capacity for innovation and its technological expertise, the Group is contributing to the development of five markets of the future: mobility, electronics, healthcare, industrial merchant and high technologies. With ADVANCE, it intends to strengthen its positioning in these sectors. Acting Acting for all for all As a civic-minded company, Air Liquide strives to ensure that everything it does is in the interests of its employees, its customers and its patients, its shareholders and its partners and, beyond that, of society as a whole. By relying on >+ 160 bps O P E R AT I N G M A R G I N G R O W T H O V E R F O U R Y E A R S ( 2 0 2 2 - 2 0 2 5 ) ( 2 ) €16bn R E C O R D L E V E L O F I N V E S T M E N T D E C I S I O N S ; H A L F O F T H E I N D U S T R I A L I N V E S T M E N T S ( 3 ) W I L L B E D E D I C AT E D T O T H E E N E R G Y T R A N S I T I O N 02_ALRA2021-RA&AC_GB_bat5.indd 9 28/03/2022 17:36 Board of Directors as of 12.31.2021 h. Xavier Huillard Independent Director Chairman of the Remuneration Committee Member of the Appointments and Governance Committee Born in 1954 – French i. Anette Bronder Independent Director Member of the Audit and Accounts Committee Born in 1967 – German j. Kim Ann Mink Independent Director Member of the Remuneration Committee Born in 1959 – American k. Fatima Tighlaline Director Representing Employees Born in 1979 – French l. Aiman Ezzat Independent Director Born in 1961 – French m. Bertrand Dumazy Independent Director Born in 1971 – French The Board of Directors is composed of 13 members: 11 who are appointed at the Annual General Meeting and two who represent Air Liquide employees. The Board of Directors brings together a diverse range of proﬁles. Five nationalities are represented from Europe, America and Asia and 55% of elected members are women. They bring a wealth of skills (ﬁnancial, managerial, digital, scientiﬁc, international development, etc.) and a diversity of experience in a variety of sectors (chemicals, consumer products, healthcare, research, services, construction, automotive, etc.). 10 The Board of Directors determines Air Liquide’s objectives and ensures their implementation in line with its corporate interest, by taking into account the social and environmental stakes of its business. Accordingly, it examines and approves the Group’s major strategic priorities. In 2021, it focused in particular on the impacts that the Covid-19 pandemic had on the Group and notably the measures taken to protect the health of employees; performance analysis; the Group’s strategy taking into account environmental and social issues; the continued application of the Sustainable Development policy and the establishment of new ESG/Climate objectives; the development of the new 2025 ADVANCE strategic plan; industrial investment decisions; the energy transition and the development of hydrogen; and governance matters, including the decision to separate the roles of Chairman of the Board of Directors and of Chief Executive Officer. In this context, the Board that will meet after the May 2022 Annual General Meeting will be asked to renew the mandate of Benoît Potier as Chairman of the Board of Directors and to appoint François Jackow as Chief Executive Officer, effective June 1, 2022. a. Benoît Potier Chairman and Chief Executive Officer Born in 1957 – French b. Jean-Paul Agon Independent Director Lead Director Chairman of the Appointments and Governance Committee Member of the Remuneration Committee Born in 1956 – French c. Siân Herbert-Jones Independent Director Chairman of the Audit and Accounts Committee Born in 1960 – British d. Sin Leng Low Independent Director Member of the Audit and Accounts Committee Born in 1952 – Singaporean e. Annette Winkler Independent Director Chairman of the Environment and Society Committee Member of the Appointments and Governance Committee Born in 1959 – German f. Philippe Dubrulle Director Representing Employees Member of the Environment and Society Committee Born in 1972 – French g. Geneviève Berger Independent Director Member of the Environment and Society Committee Born in 1955 – French 02_ALRA2021-RA&AC_GB_bat2.indd 10 25/03/2022 12:12 d. h. 11 a. e. i. l. b. f. j. m. c. g. k. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 11 25/03/2022 12:12 Executive Committee as of 12.31.2021 12 The Executive Committee coordinates the Group’s various programs and activities. It reviews the operational management of the business and oversees the implementation of transformation projects and business development. In 2021, the Executive Committee continued to lead initiatives in response to the public health crisis. Action plans were implemented to protect the safety of employees and partners through adapted work organization, and to guarantee continuity of service in essential sectors, especially healthcare. Regarding strategy, the Executive Committee has been particularly focused on rolling out the Sustainable Development Objectives across the Group – including through a new internal governance framework for CO2 emissions management – as well as developing the new ADVANCE strategic plan for 2025. Benoît Potier Chairman and Chief Executive Officer. Born in 1957 – French François Jackow Executive Vice President supervising the Europe Industries, Europe Healthcare and Africa/Middle East/India hubs. He also supervises the Healthcare world business line and the Innovation, Technologies, Digital/IT functions and the Customer Experience program. Born in 1969 – French 02_ALRA2021-RA&AC_GB_bat5.indd 12 28/03/2022 17:38 Michael J. Graff Executive Vice President supervising the Americas and Asia Paciﬁc hubs, he is also in charge of the Electronics world business line. Born in 1955 – American Fabienne Lecorvaisier Executive Vice President in charge of Sustainable Development, Public and International Affairs, Societal Programs and the Air Liquide Foundation. She is also in charge of the General Secretariat. Born in 1962 – French Jean-Marc de Royere Senior Vice President in charge of Societal Programs. He is also Chairman of the Air Liquide Foundation. Born in 1965 – French François Venet Senior Vice President in charge of Strategy. He also supervises the Large Industries world business line and Engineering & Construction. Born in 1962 – French Pascal Vinet Senior Vice President in charge of the Europe Industries and Africa/Middle East/India hubs. He also supervises the Safety and Industrial Systems function. Born in 1962 – French François Abrial Vice President in charge of the Asia Paciﬁc hub. Born in 1962 – French 13 Marcelo Fioranelli Chief Executive Officer of Airgas. Born in 1968 – Brazilian Matthieu Giard Vice President supervising Hydrogen activities and the Industrial Merchant world business line, the Procurement function and Efficiency programs. Born in 1974 – French Armelle Levieux Vice President, Group Human Resources. Born in 1973 – French Émilie Mouren-Renouard Vice President in charge of Innovation, Digital & IT, and Intellectual Property, as well as the Global Markets & Technologies activity. Born in 1979 – French Jérôme Pelletan Chief Financial Officer Born in 1970 – French Air Liquide Diana Schillag Vice President in charge of Healthcare activities in Europe and the Healthcare world business line. Born in 1971 – German 02_ALRA2021-RA&AC_GB_bat3.indd 13 25/03/2022 18:03 14 At the heart of the future 01. Building a low-carbon society 02. Improving patients’ quality of life 03. Contributing to a more connected world 04. Helping industries meet the challenges of tomorrow 02_ALRA2021-RA&AC_GB_bat2.indd 14 25/03/2022 12:13 Leveraging its innovation capabilities and technological expertise, Air Liquide contributes to tackling the challenges that our societies are facing - whether they be related to industry decarbonization, healthcare transformation, digital acceleration or revolutionizing industry. We make a difference through our desire to have a positive impact on society, through our concrete achievements and our ability to invent sustainable solutions. for a more sustainable world 15 Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 15 25/03/2022 12:13 01_ 16 Building a low- carbon society 02_ALRA2021-RA&AC_GB_bat2.indd 16 25/03/2022 12:13 Tackling climate change challenges requires strong and collective action. Not only is Air Liquide committed to reducing CO2 emissions from its own operations, but we are also helping customers decarbonize at the same time. In close collaboration with industrial partners, we are increasing our involvement in a variety of large-scale clean energy solutions, such as low-carbon hydrogen production and supply, carbon capture and storage technologies and biomethane solutions. Our ambition is to act as the leader of industrial decarbonization. 17 -33% R E D U C T I O N I N A I R L I Q U I D E ’ S A B S O L U T E - V A L U E C A R B O N E M I S S I O N S B Y 2 0 3 5 €8Bn W I L L B E I N V E S T E D I N T H E L O W - C A R B O N H Y D R O G E N S U P P L Y C H A I N B Y 2 0 3 5 Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 17 25/03/2022 12:13 Foster 18 “Air Liquide is a leader in hydrogen and we are committed to investing €8 billion in the low-carbon hydrogen supply chain by 2035.” (1) International Energy Agency – 2020 (2) 2021 reports from the Hydrogen Council (3) Idem. (4) Now known as Forvia Matthieu Giard Member of the Air Liquide Executive Committee and Vice President supervising Hydrogen and Industrial Merchant activities What makes hydrogen a solution for decarbonizing industry and heavy transport? Hydrogen plays a key role in the energy transition, particularly when it comes to decarbonizing industry and heavy transport, which represent 18% and 25% of worldwide CO2 emissions respectively1. Air Liquide has 50 years of expertise in hydrogen, and 20 years ago we banked on the molecule being used for clean mobility. Since 2021, things have rapidly accelerated. More than 30 governments have positioned hydrogen at the heart of their energy strategy, with 100 billion euros2 pledged in support of its large-scale roll-out. By 2050, it is expected to account for more than 20% of global end-use energy demand3. As a pioneering group in the hydrogen sector, how can Air Liquide accelerate this roll-out? The entire hydrogen ecosystem is in development! We ﬁrmly believe that when it comes to tackling environmental challenges, we are all in this together. In this ramp-up phase, we are forging strategic partnerships with industry and transport stakeholders including TotalEnergies, Siemens Energy, BASF, Airbus and Faurecia4, to create industrial projects and infrastructures for the production and distribution of hydrogen. To accelerate our efforts alongside our industrial and ﬁnancial partners, we have created the largest global fund fully dedicated to expanding hydrogen infrastructure, funded with 1.5 billion euros. In the face of climate change, it is crucial that we combine technologies, expertise, and industrial and ﬁnancial capabilities to accelerate the production and use of low-carbon hydrogen. What do you think the development of hydrogen will look like in 10 years? The hydrogen revolution is already underway. Today, we need to boost its roll-out by leveraging the commitments made by public and private sector players to achieve carbon neutrality by 2050. We are going to invest 8 billion euros in the low-carbon hydrogen supply chain. Our strategic investments in large-scale electrolyzers, such as those we have already made in Canada, France and Germany, will bring our overall electrolysis capacity to 3 GW by 2030 for producing renewable hydrogen. The decade of hydrogen has begun, and it is our ambition to act as a hydrogen leader. 02_ALRA2021-RA&AC_GB_bat3.indd 18 25/03/2022 18:03 Cristina Ballester Vice President Large Industries Europe, Air Liquide Why is carbon capture and storage (CCS) considered an essential lever to reach carbon neutrality by 2050? While society is accelerating the usage of renewable energy to address climate urgency, we also need solutions that will support the transition by enabling the capture of large volumes of CO2 emitted by industrial actors. This avoids emissions in the short term, particularly from industries whose emissions are hard to abate, such as cement, steel and chemicals. In these sectors, CCS is an effective and viable solution for industrial processes that don’t yet have alternatives. How is Air Liquide answering this challenge? We have been developing carbon management solutions for 15 years. Our CryocapTM CCS solution uses cryogenics technology to capture CO2. The process is highly efficient compared to solvent-based technologies, recovering up to 98% of CO2. CryocapTM is part of a full carbon capture service offer we are currently developing that will include CO2 capture, puriﬁcation, liquefaction, storage and transport to the sequestration site. In some cases, we also recycle the CO2 for other uses (carbonation of sparkling beverages, food preservation and freezing, etc.). The maturity of our solutions portfolio and our expertise give us legitimacy in this key growth area that is crucial to reducing industrial carbon footprints. Our customers know they can rely on us for performance, reliability, safety and supply continuity. Do you have some recent concrete examples to illustrate this? We have several projects underway in Europe. For example, in France, in the Dunkirk industrial basin, we’ve joined forces with ArcelorMittal to develop an ecosystem to sequester up to 3 million metric tons of CO2 from the steel industry. In Normandy, France, and Zeeland, the Netherlands, we’re implementing large-scale CCS solutions at hydrogen production units in collaboration with TotalEnergies. With BASF in Antwerp, Belgium, we’re planning to develop the world’s largest cross-border CCS value chain. The Kairos@C project (see p. 58) won support from the European Innovation Fund, conﬁrming the efficiency of our technology, which an increasing amount of industries will need to reach carbon neutrality. 19 “The maturity of our portfolio of carbon capture and storage solutions and our expertise give us legitimacy in contributing to the decarbonization of industry.” Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 19 25/03/2022 12:13 Achieve 20 01_Hydrogen production unit in Normandy, France Developing the world’s ﬁrst low-carbon hydrogen network in Normandy, one of Europe’s largest industrial basins. 02_World’s largest oxygen production site, South Africa Reducing CO2 emissions by 30% to 40% by 2030. Air Liquide is working with TotalEnergies to decarbonize hydrogen production on its petrochemical platform. The Group will take over the existing production plant and supply TotalEnergies with low-carbon hydrogen, and the two companies will also join forces to deploy a CO2 capture and storage solution (CCS). By 2025, an electrolyzer of at least 200 MW will be connected to the existing hydrogen network, making this the world’s ﬁrst low-carbon hydrogen network. The Group is also collaborating with TotalEnergies, Borealis, Esso and Yara to develop CCS infrastructure. Since June 2021, Air Liquide has been running the 17 Air Separation Units (ASUs) at the oxygen production site owned by Sasol, a South African company specializing in energy and chemicals. It is now the world’s largest oxygen production site. The Group is currently operating the ASUs and is also drawing up plans to modernize the units. The goal is to optimize the units’ production capacity and energy consumption while reducing CO2 emissions arising from oxygen production by 30% to 40%. 02_ALRA2021-RA&AC_GB_bat2.indd 20 25/03/2022 12:13 21 03_Largest PEM(1) electrolyzer in the world, Quebec, Canada Producing renewable hydrogen on an industrial scale. 04_Low-carbon Air Separation Unit (ASU), China Building the world’s largest low-carbon ASU for the steel industry. By inaugurating the world’s largest PEM(1) electrolyzer in 2021, Air Liquide has reaffirmed its goal of achieving carbon neutrality by 2050. This next-generation electrolyzer is 99% powered by renewable hydraulic energy and produces up to 8.2 metric tons of hydrogen per day, which is enough to power more than 2,000 cars or 230 trucks. It will cut CO2 emissions by 27,000 metric tons per year, which is equivalent to the emissions of 10,000 cars. (1) PEM: Proton Exchange Membrane. Air Liquide will build and operate a low-carbon Air Separation Unit in Zhangjiagang City, Jiangsu Province. Designed for Jiangsu Shagang Group, the biggest private steel company in China, this state-of-the-art unit, capable of producing 3,800 metric tons of oxygen per day, will signiﬁcantly reduce CO2 emissions. By becoming the Group’s largest source of liquid oxygen and nitrogen in China, the unit will supply industrial customers and hospitals in the east of the country. It will also supply krypton and xenon to meet the growing demand of the local electronics industry. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 21 25/03/2022 12:13 Invent Air Liquide ﬁrmly believes that hydrogen is the key to accelerating the energy transition. The Group is partnering with major players from various sectors who offer complementary skills to harness the full potential of hydrogen, from production to future distribution methods. This generates a reduction in industrial CO2 emissions and an increase in the development of clean transportation. Decarbonized industry 22 Europe is taking a major step in furthering industry and mobility decarbonization. Air Liquide and Siemens Energy have joined forces to create a European ecosystem of hydrogen production technologies by electrolysis, thereby promoting the emergence of a sustainable hydrogen economy in Europe. One of the large projects backed by the French and German authorities is the construction of a renewable hydrogen production unit with a capacity of 30 MW in Oberhausen, Germany. This industrial-sized unit will be the ﬁrst of its kind to be connected to the existing Air Liquide pipeline network. (1) Aéroports de Paris, a global leader in airport design, construction and operation. (2) Now known as Forvia. 02_ALRA2021-RA&AC_GB_bat2.indd 22 25/03/2022 12:13 The future of aviation What if the airplane of the future was powered by hydrogen? This is the ambition that Airbus has set for 2035. In preparation, Air Liquide is already collaborating with the aircraft manufacturer and Groupe ADP1 to develop liquid hydrogen production and supply future infrastructure for Parisian airports. At Lyon-Saint Exupéry Airport, the pilot site, Air Liquide and Airbus are working with VINCI Airports to develop the ﬁrst hydrogen facilities by 2023. On the runway, buses, trucks and ground handling machines will run on hydrogen thanks to a distribution station. This station will also supply heavy trucks moving around the airport, thereby creating a local hydrogen hub. 23 Sustainable transport Especially suitable for intense use by heavy trucks, hydrogen offers maximum range and fast refueling. With this goal in mind, Air Liquide has partnered with Faurecia(2) to develop a liquid tank system that will double on-board hydrogen capacity compared to gaseous hydrogen. The Group is pairing its expertise with that of the vehicle systems specialist so that they can co-design and co-produce hydrogen tanks that will give trucks twice the range for the same payload. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 23 25/03/2022 12:13 02_ 24 Improving patients’ quality of life 02_ALRA2021-RA&AC_GB_bat2.indd 24 25/03/2022 12:13 Because every patient experiences their illness differently, Air Liquide favors personalized care pathways. This is a virtuous approach that aims to improve both the patient’s health and quality of life at the best cost for the healthcare system. Working daily with all healthcare professionals, the Group contributes to the transformation of healthcare at home, in hospitals and in other care settings by offering innovative solutions that create value for all healthcare stakeholders. 25 1.8M P A T I E N T S A T H O M E A R O U N D T H E W O R L D I N 2 0 2 1 , 38% O F W H O M A R E F O L L O W I N G A P E R S O N A L I Z E D C A R E P A T H W A Y Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 25 25/03/2022 12:13 Foster 26 “The Value-Based Healthcare approach returns patients to the heart of the healthcare system, with the goal of improving their quality of life at the best cost for the healthcare system.” (1) Including the OECD (Organization for Economic Cooperation and Development) and EIT Health (a network of actors working in the ﬁeld of health innovation, supported by the European Union). Dolores Paredes Vice President of Markets, Strategy and Innovation at Air Liquide’s Healthcare activity You launched the transformation of Air Liquide’s Home Healthcare business by implementing a Value-Based Healthcare approach. Could you please explain what this means? This approach focuses on patients beyond their illness. We put them, as people, at the heart of the healthcare system, taking into account everything that makes them unique. By this I mean their relationship with their illness, their history, their lifestyle and even their family situation. We are moving from a service-based approach to an approach that focuses on the key beneﬁts for patients to improve their quality of life in a more cost-effective way. It is a unique opportunity to organize the entire healthcare ecosystem around a common goal. Leading stakeholders are already implementing it in several countries (hospitals, clinics, healthcare systems), and the results are promising. International organizations(1) are taking part in this transformation and helping shape healthcare policies that promote the emergence of value-based initiatives. In what way is this approach strategic for Air Liquide? Around the world, healthcare systems are facing a two-fold challenge: ensuring their continuity and upholding quality of care. Value-Based Healthcare is now essential for Air Liquide, which is taking long-term action to meet this challenge. Today, Air Liquide takes care of 1.8 million patients with chronic diseases. Our combined human and digital approach allows us to offer them more personalized care pathways. Our proximity to our patients and our role as a major player in home healthcare alongside healthcare professionals allow us to contribute to the transformation of healthcare. What challenges do you face in the coming months? Although several European countries have begun this patient-centered transformation process, the challenge now is ensuring this initiative is adopted in all regions. We must fundamentally rethink care pathways, with the goal of making them more personalized in order to improve patients’ health and quality of life. We need to prove the value we are generating with this approach, and this requires systematic measurement of the beneﬁts to the patient. This is a complex but exciting task. It requires a coordinated approach from all healthcare professionals in order for the entire ecosystem to reap the beneﬁts. This includes physicians, who can rely on our teams to ensure compliance with treatment, those responsible for covering the costs, who see the optimization of overall care costs, and hospitals, which can focus on critical procedures. 02_ALRA2021-RA&AC_GB_bat2.indd 26 25/03/2022 12:13 Louis-François Richard Vice President of Medical Gases at Air Liquide, Europe Air Liquide has a major presence in hospitals with medical gases and related services. Accordingly, how can Value-Based Healthcare be adapted to healthcare institutions? Value-Based Healthcare is a unique approach that encourages all stakeholders to jointly re-examine the beneﬁts for patients and to be involved in the transformation of healthcare systems. We work in partnership with each stakeholder in the healthcare pathway (hospitals, urban medicine and emergency services) to help medical professionals concentrate on tasks with greater added value for patients, while securing the availability of the medical gases they need on a daily basis. What does that mean specifically? Today we are only in the early stages of using the Value-Based Healthcare approach to beneﬁt hospitals. But we already have solutions in place that ease the work of caregivers and optimize costs for hospitals. Besides supplying medical gases, we offer services that account for all hospital needs. One example of this is Total Gas Management, which enables everything in the gas logistics process to be managed on the hospital site. Another example is our new line of cylinders for medical oxygen that facilitates the administration of medical oxygen, patient mobility and inventory management for hospital caregivers, who have been in extremely high demand during the pandemic. Hospitals face a great many challenges. How are you responding to them? All hospitals do indeed face sizable challenges: accommodating patients in greater and greater numbers, lowering costs without affecting quality of care and participating in regional care networks, all while remaining a hospital of choice. We are adapting to these challenges by redesigning our operational models. As an example, we want to offer a comprehensive care package per patient treated, rather than per products and services supply. Such a model lets us offer optimal quality of care to the beneﬁt of the patient, the healthcare professionals and the healthcare system as a whole. 27 “At hospitals, we offer gases and service solutions that take into account the needs of all medical professionals, while optimizing costs.” Air Liquide 02_ALRA2021-RA&AC_GB_bat3.indd 27 25/03/2022 18:04 Achieve 28 01_Covid-19: Producing and distributing more medical oxygen Teams mobilized to meet the needs of hospitals. 02_Supporting vaccine research Contributing to global efforts to ﬁght Covid-19 by opening access to a new adjuvant that increases the efficacy of vaccines. All over the world, Air Liquide has stepped up in the face of the pandemic by supplying the medical oxygen needed to combat Covid-19. Our employees raced against the clock to offer help to caregivers by increasing production and adjusting the supply chain. In the hardest-hit areas, hospital demand for oxygen increased sixfold and even tenfold. Furthering vaccine research is one of our ambitions. Seppic, an Air Liquide subsidiary that manufactures specialty ingredients, stepped up in the face of the pandemic by making its Sepivac SWE™ adjuvant— which was developed in partnership with the Vaccine Formulation Institute(1)—available to the global scientiﬁc community. Available without a license, this adjuvant helps accelerate the development of vaccines to combat inﬂuenza and Covid-19. (1) A not-for-proﬁt body affiliated with the World Health Organization. 02_ALRA2021-RA&AC_GB_bat2.indd 28 25/03/2022 12:13 29 03_Acquisition of Betamed, a Polish leader in home healthcare 04_Launch of the Making Diabetes Easier website Building on the at-home support services we offer to patients in Europe with complicated illnesses. Enabling patients and their families to live with diabetes more comfortably, using a single information platform. The 2021 acquisition of Betamed, a Poland- based leader in home healthcare, was a turning point for Air Liquide, adding to its European presence in complex treatments. With expertise in long-term home care and mechanical ventilation, Betamed enables the Group to broaden its range of services and products across the entire care pathway for people with severe illnesses, either at home or in a specialized clinic. Living with diabetes requires an understanding of the condition and how to manage it on a daily basis. Harnessing 20 years of experience in treating diabetes, Air Liquide launched the website Making Diabetes Easier, which provides practical learning resources for diabetic patients (particularly those living with Type 1) to improve their daily lives. Available in Europe in six languages, this website deals with subjects as varied as diabetes management, nutrition, sports, school, sleep management and more. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 29 25/03/2022 12:13 Invent Re-inventing the care pathway is a crucial factor in improving how the needs of patients are met. Playing a role along with caregivers in the transformation of the healthcare sector, Air Liquide has devised innovative, patient-centric solutions. These approaches foster personalized treatment, to both improve the follow-up care patients receive and their overall quality of life. 30 Personalized healthcare In partnership with healthcare professionals, Air Liquide has committed to rethinking home healthcare services by adapting them to patients’ real needs and lifestyles. Since living with an illness is a different experience for each patient, the Group has set up a digital platform that connects the different stakeholders at each stage of the care pathway, enables follow-up care to be adapted and maximizes patient satisfaction thanks to innovative data-driven solutions. 02_ALRA2021-RA&AC_GB_bat2.indd 30 25/03/2022 12:13 Predictive Science allowing for the adjustment of gas production and supply to hospitals. Using data acquired from tracking apnea patients with connected devices, another algorithm identiﬁes the risk of patient non-compliance and therefore how their support can be better preventively adapted. How can we leverage the potential of data to create more value in healthcare? This can be demonstrated by two approaches developed by Air Liquide, which is investing in the ﬁeld of artiﬁcial intelligence as a way to better support hospitals and patients. The Group perfected a system that can predict oxygen consumption patterns in hospitals by combining public Covid-19 data with internal data, 31 Vital Molecule The pandemic has highlighted the crucial role of medical oxygen for treating patients in respiratory distress. Air Liquide teams, with the help of physicians, are seeking to develop a new non-invasive, ventilation device that is easy to use and can be bulk manufactured. This device would enable to deliver very high rates of oxygen while optimizing consumption and can treat more patients than current devices. In a period of crisis, this is an effective solution when the time of medical professionals and oxygen are in high demand. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 31 25/03/2022 12:13 03_ Contributing to a more connected world 32 02_ALRA2021-RA&AC_GB_bat2.indd 32 25/03/2022 12:13 Semiconductors lie at the heart of the digital revolution that is profoundly transforming society. In the ultra-competitive electronics sector, the innovation race encourages the design of increasingly smaller and more powerful components, all while reducing their environmental impact. As a strategic partner to major electronic customers, Air Liquide supports their geographic expansion and helps them face technological challenges, from supplying advanced materials to relocating production units. 157K M E T R I C T O N S O F C O 2 E M I S S I O N S A V O I D E D I N T H E E L E C T R O N I C S I N D U S T R Y T H A N K S T O A I R L I Q U I D E ’ S E N S C R I B E ™ S O L U T I O N S I N 2 0 2 1 33 100% O F L A T E S T - G E N E R A T I O N S M A R T P H O N E S C O N T A I N C H I P S , M E M O R Y, S E N S O R S A N D D I S P L A Y S M A D E W I T H A I R L I Q U I D E ’ S G A S E S A N D A D V A N C E D M A T E R I A L S Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 33 25/03/2022 12:13 Foster 34 “We offer a unique range of solutions and advanced materials for the electronics sector backed by the best innovation capability in the industry.” Christian Dussarrat Electronics R&D Program and Scientific Director, Tokyo Innovation Campus, Air Liquide What role does Air Liquide play in the electronics industry? As society becomes increasingly digital, the electronics industry is faced with growing demands for increased performance and production of semiconductors. Air Liquide helps the industry by providing the ultra-pure gases and innovative materials necessary for manufacturing chips. The Group’s innovation capacity facilitates the development and manufacturing of the highest-quality, fastest and most powerful nanoscale devices. What challenges are electronics players facing? In roughly 15 years, the size of silicon transistors has already decreased from 65 to 5 nanometers. At this scale, ﬂawless quality, product stability, safety and reliability are critical, which is why the electronics industry has speciﬁc and very stringent quality requirements for all gases and chemicals supplied to its production plants. In addition to these technological challenges, the industry is also committed to producing semiconductors with smaller environmental footprints, to contribute to low-carbon computing. How is Air Liquide supporting customers to meet these challenges? We are driven by our innovative mindset. Since the early 2000s, we have been working on materials called precursors, which deliver speciﬁc tailored solutions to customers in the memory and logic segments. More recently, enScribe™ range materials allow etching at a nanoscale with a minimized environmental impact. Over the years, we have ramped up our expertise and now we offer a unique portfolio of solutions and advanced materials backed by the best innovation capability in the industry. 02_ALRA2021-RA&AC_GB_bat5.indd 34 28/03/2022 17:38 Ken Liu Strategic Account Director, Electronics activity at Air Liquide, Taiwan Island In 2021, Air Liquide signed new contracts with a key Taiwanese electronics player. Can you tell us more? Air Liquide’s global presence and its unique product portfolio make it an attractive partner to electronics leaders around the world. We are proud to have signed new contracts with a key Taiwanese customer who is taking its geographical expansion up a notch. This customer will be opening a new manufacturing site in Arizona, U.S., with a monthly capacity of 20,000 wafers(1), and we will be supplying ultra high purity hydrogen, helium, and carbon dioxide to this facility. We are also in talks with them to partner on further expansion in Taiwan Island and Japan. How does Air Liquide make the difference from its competitors in the electronics sector? When it comes to overseas expansion, semiconductor manufacturers want to partner with suppliers they know and trust. We have been supporting this customer and most of the key electronics players for years. They are reassured by our international presence and ability to provide a single customer interface anywhere in the world. Additionally, our product portfolio is simply the most comprehensive on the market, from ultra-pure carrier gases to novel advanced materials. There is currently strong demand for semiconductors, but an uncertain outlook in areas such as supply chains and international trade. Which challenges is Air Liquide facing as it supports customers expansion? Sustaining the rapid growth of the industry is not easy. Our expertise and proximity with our customers around the world promote optimal responsiveness and strict quality control. Throughout the Covid-19 pandemic, we didn’t have a single supply chain interruption. Our locations in key electronics hubs like Japan and China also allow us to secure the most cutting-edge solutions for our customers and to support them in their relocation and expansion plans. 35 “Our product portfolio is simply the most comprehensive on the market, from ultra-pure carrier gases to novel advanced materials.” (1) Silicon wafers used for the manufacturing of integrated circuits. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 35 25/03/2022 12:13 Achieve 36 01_A lasting carrier gas partnership in Virginia, U.S. Supplying one of the world’s largest semiconductor manufacturers with extensive carrier gas. For over 30 years, Air Liquide has worked closely with a key manufacturer, a powerhouse of innovative memory solutions present in Asia and North America. Upon expanding their Manassas, Virginia site to meet growing demand for digital products, this customer agreed to a 15-year contract extension with Air Liquide, increasing the carrier gas supply requirements at its site. This partnership is now Air Liquide Electronics U.S.’ single largest investment to date. 02_Ultra-high purity low-carbon hydrogen electrolyzers, Taiwan Island Constructing low-carbon hydrogen electrolyzers at the Tainan and Hsinchu Science Parks. To meet the growing demand for high-purity hydrogen in the electronics sector, Air Liquide is investing in production units at the Tainan and Hsinchu Science Parks, two of the most advanced semiconductor basins in the world. The ﬁrst electrolyzer was successfully delivered in 2021. When completed, the production site will have a total capacity of 25 MW and will avoid 35,000 metric tons of CO2 direct emissions annually. Those plants will allow the Group to supply low-carbon hydrogen to local semiconductor manufacturing plants. 02_ALRA2021-RA&AC_GB_bat3.indd 36 25/03/2022 18:05 37 03_For a more sustainable semiconductor industry Helping the electronics industry reduce its carbon emissions through more efficient semiconductors. 04_Localization of advanced materials production Supporting customers as they relocate production closer to home for increased supply chain security. Air Liquide’s Advanced Materials centers design cutting-edge technologies that enable the production of the smallest semiconductors yet. In turn, as devices shrink, they become better insulated and more energy efficient, which has allowed for energy savings even as global demand surges. Between 2010 and 2018 alone, data centers reduced their electricity consumption by ~297 TWHr thanks in part to the continued performance improvement of semiconductors and Air Liquide’s advanced materials. Microchip manufacturing sites are facing increased demand for advanced materials and growing risks related to complex global supply chains. This context is pushing them to localize their materials sourcing. Air Liquide invests alongside industry leaders in materials production facilities, allowing them to ensure the quality and the security of their supply. The recently commissioned facility in Singapore expands our existing network of centers, strategically located in electronics hubs in Japan, South Korea, Taiwan Island, the U.S. and Europe. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 37 25/03/2022 12:13 Invent The acceleration of the digital transformation both inspires and tests the limits of the electronics industry. Air Liquide is leveraging its rich expertise, innovation capability and global presence to help industry leaders meet their challenges and make the most advanced technologies a reality in everyone’s daily life. Autonomous driving 38 The rapid growth of driver-assistance and car connectivity functions is bringing us closer and closer to self-driving cars. This progress is supported by smarter infrastructure, more powerful on-board processing and the miniaturization of real-time sensors, all of which require larger quantities of increasingly efficient semiconductors. Air Liquide’s innovative materials allow the semiconductor industry to meet this performance challenge. The Group’s global presence, production capacity and quality management system support both the growth and the zero-defect production demanded by the automotive industry. 02_ALRA2021-RA&AC_GB_bat2.indd 38 25/03/2022 12:13 Artificial intelligence The reach of artiﬁcial intelligence (AI) has expanded rapidly in the last decade, leaving no sector of our daily life untouched. AI requires extremely powerful processors to access and treat enormous quantities of data in a record time, imitating the functionalities of a human brain but surpassing by far its capacity and processing speed. The semiconductors behind these calculations must be extremely powerful and fast, but also energy efficient. Air Liquide leverages its innovation capabilities and proximity with the semiconductor ecosystem to invent new materials which allow the semiconductor industry to meet these challenges and advance the abilities of AI. 39 Nanometric solutions The newest semiconductors must be of impeccable quality and capable of delivering peak performance and minimal environmental impact, all at the smallest possible size. EnScribe™, an Air Liquide portfolio of advanced etch materials, was developed in partnership with semiconductor manufacturer partners to help them meet both the technological and environmental challenges of manufacturing the tiniest microchips. A signiﬁcant step towards low-carbon computing. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 39 25/03/2022 12:13 04_ 40 Helping industries meet the challenges of tomorrow 02_ALRA2021-RA&AC_GB_bat2.indd 40 25/03/2022 12:13 Present in a wide variety of markets, Air Liquide is in a privileged position to observe and detect new trends, needs and uses across industrial ecosystems. Drawing on the powerful potential of essential small molecules and data management, the Group innovates with and for its customers to offer them new gas applications that contribute to their operational efﬁciency and address the challenges of both new emerging markets and the energy transition. 2M I N D U S T R I A L C U S T O M E R S W O R L D W I D E 41 €2.9Bn O F I N D U S T R I A L M E R C H A N T S A L E S A R E R E L A T E D T O S O L U T I O N S T H A T P R O T E C T L I F E A N D E N V I R O N M E N T Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 41 25/03/2022 12:13 Foster 42 “Data is a powerful tool for improving the customer and employee experience.” (1) A program for digitizing the liquid gas supply chain Laure Pouyanné Business Data Manager, Industrial Merchant activity, Air Liquide How does digital data enable Air Liquide to better meet the expectations of its customers? Just like our customers, we have to produce sustainably, offer a quality experience and meet the latest industry expectations. Data is a powerful enabler for us in overcoming these challenges. The Integrated Bulk Operations1 program, which is currently being rolled out, is a good example. By digitally connecting logistical assets (production plants, tanks installed on customers’ sites or trucks), we are able to collect and analyze data to optimize the liquid gas supply chain in real time. The key here is that our logistics teams can anticipate customer requests and identify the right time for delivery by organizing more efficient and reliable delivery rounds. This gives us an agile logistics chain for better customer service while lowering our CO2 emissions! What role do employees play in this digital transformation? Our employees are experts in our business processes and are in close contact with our customers. So involving them from the start is crucial when working together to build solutions that can improve our operational efficiency. This in turn provides a better customer experience. For example, the Digital and R&D teams worked with operators in France to design a solution that would increase their productivity in preparing customer orders for gas cylinders while optimizing handling operations. What is the greatest challenge in optimizing data management? Supporting decision-making, anticipating needs, managing performance and more. There is a wealth of data available and our teams were quick to see the value in capitalizing on it. So much so that you hear them talking about “their” data. Now the challenge is to upskill and train teams, an indispensable investment that maximizes the potential of data. In the future, using data will be part and parcel of employees’ everyday work. 02_ALRA2021-RA&AC_GB_bat2.indd 42 25/03/2022 12:13 Steve Hope Vice President Markets & Strategy, Industrial Merchant activity, Air Liquide A new ecosystem intelligence approach is being tested in the Industrial Merchant activity. What does this involve? Essentially, it is about challenging our orthodoxies around how we look at current and new markets. The idea is to go outside our normal bounds and look at all stakeholders, their drivers of change and their interactions. We then build a strategic analysis that better addresses an individual market, prioritizing actions and reducing the time to market for relevant solutions. To do this, we need to be part of a broad, diverse ecosystem where we are connected with key stakeholders. Supported by the i-Lab,(1) we’re testing the approach on some market segments such as water treatment in the pharmaceutical industry. How strategic is this approach for your business? To stay ahead in a fast-changing world, we must detect trends and understand how they will shape our business regarding new customers, stakeholders (customers, customers’ clients, suppliers, public authorities, etc.) and business models. By being proactively involved in an ecosystem, we can deepen our knowledge and ask ourselves the right questions: What will this customer look like in ﬁve years? How will energy transition trends affect customers, and what impact will they have on their business and on the value chain? Who are the new players in the market? This approach puts us at the forefront of change so we can understand how disruption impacts our customers’ needs, and we can anticipate their future expectations and come up with new solutions. What is the value for Air Liquide and your customers? An ecosystem-based process gives a much better read of the customer’s environmental, regulatory and supply chain context across markets, helping us to prioritize actions and align resources. We start with their pain points and ecosystem changes and then build on them using a customer-centric approach. This can also lead to unlikely pairings or partnerships that accelerate our thinking and shape customer outcomes. By identifying critical water treatment challenges within the pharmaceutical industry that could be addressed by our technological expertise, we forge new connections to solve issues and create value for every player in the ecosystem. 43 “There is a transformation underway that demands a completely different way of understanding and engaging our customers and their key stakeholders.” 1. Air Liquide’s foresight department which investigates emerging trends and topics, and develops foresight tools and methodologies. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 43 25/03/2022 12:13 Achieve 44 01_A production furnace at a glass plant Reducing energy consumption and CO2 emissions by improving the oxy-combustion process. Glass manufacturers are increasingly seeking to improve energy- and cost- efficiency and furnace proﬁtability while reducing pollutants. Air Liquide’s heat- oxycombustion technology improves the glass production process by reusing heat that would otherwise be wasted. An EU- funded study at a Bulgarian glass factory demonstrated that heat-oxycombustion reduced emissions of CO2 by 19% and of nitrogen oxides by 90%. 02_An innovative training approach for welders Supporting welding customers to become more competitive around the world. In the highly competitive metal fabrication market, customers seek increased productivity, improved quality and cost reductions. Air Liquide U.S. subsidiary Airgas offers a comprehensive, systematic program to help customers gain more value and continuously improve. The innovative “Unlocking the Hidden Cost of Welding™” program provides professional training, quality management methods and ongoing digital benchmarking tools, and is currently being successfully deployed in Europe and in Asia. 02_ALRA2021-RA&AC_GB_bat2.indd 44 25/03/2022 12:13 45 03_Integrated and sustainable water treatment solution Partnering with Inopsys, a Belgian specialist in treating chemical and pharmaceutical wastewater. Some waste waters from complex industrial processes are non-recyclable and often transported for incineration, a costly and CO2-intensive process. Air Liquide offers its customers an integrated and sustainable solution, developed in collaboration with Inopsys, that uses hybrid technology to purify wastewater streams on site. The Group initially shared its pioneering work in advanced oxidation with Inopsys, and now supplies the company with pure oxygen and strategic expertise. 04_Indoor vertical farming Developing a foothold on indoor vertical farming in Singapore through a new partnership with the company &ever. Aiming to create a buffer from supply disruptions and produce 30% of its nutritional needs locally by 2030, Singapore called upon the German company &ever to develop indoor vertical farming in the country. Air Liquide will support &ever’s sustainable operations to supply carbon dioxide, crucial for plant growth, which can help increase their yield and growth rate. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 45 25/03/2022 12:14 Invent To meet the challenges facing society, a profound transformation of industry is underway. Air Liquide is contributing by working with its customers to build more innovative and sustainable industries. The Group develops new solutions for the future that support those involved in bringing about new industrial revolutions, whether that is electric vehicles, 3D printing or the agriculture of tomorrow. Electrical revolution 46 The electric vehicle revolution is gaining speed and Air Liquide is a key player, as gases are crucial in manufacturing the next generation of batteries with an extended range and a reduced carbon footprint. The Group provides its expertise to the world’s leading companies in this ecosystem. Gas solutions are needed along the entire value chain, from extracting raw materials and producing electrodes to assembling cells and recycling. 02_ALRA2021-RA&AC_GB_bat2.indd 46 25/03/2022 12:14 Additive manufacturing In 2021, the ﬁrst 3D-printed metal bridge was inaugurated in Amsterdam. This was a technological feat to which Air Liquide made a major contribution. The Group shared the welding and additive manufacturing expertise of its R&D teams and provided shielding gases to MX3D, the tech start-up that masterminded the project. More generally, industrial gases play a key role throughout the chain of additive manufacturing processes, ensuring their safe execution, operational stability and the ﬁnal quality of the metal parts. 47 Alternative proteins equipment solutions to those working in this ﬁeld. The Group has forged R&D and industrial partnerships notably in Belgium, Canada, France and Germany, to support the development of this high-growth sector. By 2050, the Earth will have 10 billion inhabitants, and food production will need to increase by 70%. This global challenge will mean using new sources of accessible, sustainable proteins such as plant proteins, insects or proteins derived from fermentation. Air Liquide is committed to this transition through the supply of gas and Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 47 25/03/2022 12:14 At the forefront of 48 01. Quantum computing 02. Cryogenic technologies 03. Fusion 04. Space 02_ALRA2021-RA&AC_GB_bat2.indd 48 25/03/2022 12:14 Technological progress promising solutions to some of humanity’s most pressing issues is closer than ever. From new energies to space exploration and quantum computing science, Air Liquide develops cutting-edge solutions and hands-on expertise to ensure that tomorrow’s world really does arrive. technological progress 49 Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 49 25/03/2022 12:14 50 Quantum computing Minimal temperatures, maximum benefits Air Liquide, a pioneer in ultra-low temperatures, ventured even further into the cold with the 2020 acquisition of CryoConcept, a company specialized in extreme cryogenics. They have developed a dilution refrigeration solution that approaches absolute zero (-273,14°C), temperatures crucial for ground-breaking scientiﬁc research into quantum computing that promises to accelerate the search for new drugs, the discovery of new materials and even cyberdefense. 02_ALRA2021-RA&AC_GB_bat2.indd 50 25/03/2022 12:14 Cryogenic technologies Capturing, cooling and storing to save energy 51 Used initially in the space industry, Air Liquide’s Turbo-Brayton technology has found a promising market in the maritime transport of liqueﬁed natural gas (LNG). Onboard LNG tankers, it prevents boil-off, contributing to the reduction of economic loss and CO2 emissions. This technology is also used to liquefy biomethane that can then be easily transported to its point of use, such as bio-NGV (natural gas for vehicles) stations or industrial customers. This promising fuel alternative is a sustainable source of energy, of which Air Liquide will produce 1.8 TWh annually on a global scale by the end of 2022. Air Liquide 02_ALRA2021-RA&AC_GB_bat4.indd 51 28/03/2022 12:09 52 Fusion A powerful energy of the future A powerful, safe and man-made source of energy, comparable to the sun, with zero carbon emissions - this will soon become a reality. The ITER experimental reactor, currently under construction in France, is expected to be operational by 2025. Air Liquide is supplying the world’s largest centralized helium plant and the equipment that provide the cooling power essential to producing this clean and renewable energy of the future. 02_ALRA2021-RA&AC_GB_bat2.indd 52 25/03/2022 12:14 53 Space Exploring new frontiers With over 50 years’ worth of technological contributions to international space programs such as the International Space Station or the European launcher, Air Liquide has always been a key player in the development of space technology. As the pace of progress accelerates, our expertise in oxygen, hydrogen and space cryogenics technologies guide the industry’s innovation, from projects aiming to establish human colonies in space to the next generation of launch vehicles and ground systems. Air Liquide 02_ALRA2021-RA&AC_GB_bat2.indd 53 25/03/2022 12:14 At the heart of the future 54 01. Building a better employee experience 05. Helping start-ups grow 02. 06. Developing solutions jointly with our customers 03. Promoting dialogue with our shareholders 04. Joining forces to build powerful ecosystems Participating in collective initiatives 07. Creating more value with our suppliers 03_ALRA2021-RA_GB_bat2.indd 54 25/03/2022 18:20 Being competitive and innovating over the long term is only possible because of the trust of our employees, customers and patients, shareholders and all stakeholders with whom we maintain a relationship based on dialogue, responsibility and transparency. It is by forging connections and fostering inclusive exchanges that Air Liquide can build the Group’s future and contribute to a more sustainable world. acting in conﬁdence with and for all 55 Air Liquide 03_ALRA2021-RA_GB_bat2.indd 55 25/03/2022 18:20 Building a better employee experience experience 56 Debora Trevisan is the Director of Human Resources for Air Liquide Brazil. A psychologist by training, she has an MBA and began her career in HR more than 25 years ago, as an HR specialist. Since her arrival at Air Liquide in 2019, she has focused on transforming the company culture in Brazil and improving the employee experience. 03_ALRA2021-RA_GB_bat2.indd 56 25/03/2022 18:20 At Air Liquide, we create an engaging and inclusive environment that allows each employee to flourish. In Brazil, this approach has helped develop team motivation and strengthened collaboration between teams. What is Air Liquide’s approach to strengthening the employee-employer relationship? We place our employees at the center of everything we do, and we encourage them to grow and develop their potential through our program ‘Be, Act, Engage’. This initiative is based on dialogue and collaboration. We also ensure that our employees connect with and understand the company’s larger goals and objectives, which is why employee engagement is a key pillar of Air Liquide’s sustainable development strategy. In this context, we have launched many initiatives. What key initiatives are you most proud of launching? It’s impossible to choose! We have implemented new programs in several areas: safety, development, collaboration, inclusion and diversity, health and well-being, social responsibility. To do so, we have listened to employees’ expectations and engaged them in their implementation. For example, we created a Diversity Committee and founded ‘Give an UP to your CV’ to increase the inclusion of disabled persons in the workforce. We’ve remodeled our offices to include more collaborative spaces and implemented a new remote-work policy. I’m also very proud of CuidAR, a well-being program that promotes mental, physical and emotional health. Did you see changes in employee engagement? Deﬁnitely! The beneﬁts of these programs are tenfold and are demonstrated in a concrete fashion by our survey results. With My Voice, the Group program to measure employee engagement at Air Liquide, we have seen an increase of several points in our engagement index between 2020 and 2021. Another survey, the Great Place to Work external review compares us with the Brazilian market, and we have risen 13 points just between 2019 and 2021! These are great signs that our commitment to creating a welcoming and motivating environment for everyone within the company is working. Additionally, a representative of one of our suppliers told me that she had noticed positive evolution in our employees’ relationships with her team and she asked me for our strategy so that she could use it in her own company. That’s what I am most proud of! Towards a learning organization At Air Liquide, we believe in lifelong learning where employees continuously create, acquire and transfer knowledge. At the heart of our ‘learning organization,’ Air Liquide University’s role is to foster innovation, openness, performance and diversity across the Group. New learning methods are incorporated in order to keep the Group in step with 21st-century trends such as climate change and the energy transition. In 2021, 74% of employees have received at least one training course. Listening to our employee’s voices Air Liquide has launched My Voice, a program that measures employee engagement. The principles behind it are simple: listening, understanding and acting. Since its 2019 launch, feedback from employees has been collected on an annual basis to better understand their expectations and to pinpoint and take relevant actions, thus improving their experience. In 2021, 83% of employees participated in this survey. Air Liquide 57 Believing in diversity as a source of performance With 66,400 employees in 75 countries, 150 nationalities are currently represented within the Group. Air Liquide’s objective is to have diverse teams that represent the local culture in which they operate. The Group is also committed to creating equal opportunity for all and promoting a culture of inclusion, and has also set ambitious gender equality goals. In 2021, 31% of engineers and professionals were women, and four of the current 14 Executive Committee members are women. 03_ALRA2021-RA_GB_bat2.indd 57 25/03/2022 18:20 Developing solutions jointly with our customers 58 Jan Remeysen is CEO of BASF Antwerpen, the second biggest Verbund site of BASF, the world’s largest chemical company. After receiving his PhD in Chemistry, he started his career at the company 25 years ago. Since then he has worked in multiple departments at BASF Antwerpen, as well as at the company’s headquarters in Ludwigshafen, Germany. 03_ALRA2021-RA_GB_bat2.indd 58 25/03/2022 18:20 A key technology in the long-term strategy for fighting climate change, carbon capture and storage (CCS) is at the heart of this collaboration between Air Liquide and its partner BASF. You are working with Air Liquide to implement Kairos@C, a carbon capture and storage (CCS) system in the port of Antwerp, Belgium. Can you tell us more? We are planning to develop the world’s largest cross-border CCS value chain, including all the stages of carbon capture, from drying and compressing to liquefaction and storage at sea. Air Liquide will use its CryocapTM technology to capture and purify the CO2, and BASF will apply its Sorbead® solution for drying the CO2 which will be transported via pipelines on both banks of the Scheldt River to a liquefaction terminal. We are tackling hard-to-abate emissions, from chemical processes where there is currently no other way of avoiding CO2 emissions. This will lead to an estimated 14.2 million metric tons of CO2 emissions avoided over the ﬁrst ten years of Kairos@C’s operation. The infrastructure in the port of Antwerp will be available to other industrial players in the region as well. That sounds like a major milestone on the route towards low-carbon industry. It certainly is! Importantly, Kairos@C is the ﬁrst complete value chain of its kind. Besides sequestering CO2 at scale from the moment we go operational, we will deliver proof of concept to other regions. Alone, this work would be impossible to do, but through this partnership we are able to create a large-scale structure with which we can launch the value chain process and attract other industrial players. The fact that we were chosen among seven selected projects, out of 300 applicants, for funding by the EU Innovation Fund is a testament to our innovation power and the maturity of this project, as well as the strength of our partnership. How are Air Liquide and BASF working together to make this happen? Air Liquide is contributing gas capturing and liquefaction technology expertise that is central to the process, and BASF is bringing in knowledge, experience and contacts that help Air Liquide further develop the project. We collaborate on the technical and strategic levels. We regularly review and adjust our strategy, notably through technical reviews. This is nothing new for us, as our companies have been working together in Antwerp since the early 1960s. Each partner concentrates on its own strengths, which feeds the growth of complementary expertise and a mutually beneﬁcial relationship. Customer experience: from listening to action With its commitment to delivering exceptional customer experience, in 2017, Air Liquide launched the Voice of the Customer platform. This digital tool is used to collect and analyze feedback from customers and patients across the world in real time, meaning any dissatisfaction can be swiftly remedied. The platform gives each Group entity the ability to measure customer and patient satisfaction in a spirit of continued improvement and transparency. More than 200,000 customer and patient reviews have already been posted on the platform, which has been rolled out in over 60 countries. 59 A comprehensive on-site gas management solution for hospitals To help hospitals and health centers manage medical gases, Air Liquide has developed a fully customized solution, Total Gas Management (TGM), which handles all medical gas operations. Airgas, the U.S. subsidiary of Air Liquide, works with 400+ hospitals and healthcare locations around the country to support them in optimizing their supply, monitor parameters and handle all logistics. This allows caregivers to focus on patients and hospitals to operate at peak efficiency. This service was especially pertinent during intake peaks during the Covid-19 pandemic as order volumes, internal protocols and PPE(1) requirements rapidly changed. Air Liquide (1) Personal Protective Equipment 03_ALRA2021-RA_GB_bat2.indd 59 25/03/2022 18:20 Promoting Promoting Promoting Promoting dialogue with dialogue with dialogue with dialogue with dialogue with our shareholders our shareholders our shareholders 60 Simmoni de W. Head of Finance at a start-up specializing in software, Simmoni de W. has been an Air Liquide Shareholder since 2017. A member of the SCC from 2017 to 2020, she continues to be a voice for Shareholders. She is also involved with the French NGO Passerelles numériques, which enables young people from underprivileged backgrounds in South Asia to build their employability through education in the digital sector. 03_ALRA2021-RA_GB_bat4.indd 60 28/03/2022 18:08 Through the Shareholders’ Communication Committee (SCC), Air Liquide promotes dialogue and gives a voice to its Shareholders. As a former member of the Shareholders’ Communication Committee (SCC), how would you describe your experience? My time on the SCC was extremely rewarding. I was very pleasantly surprised by how attentive Air Liquide is toward its Shareholders. I felt that my voice was being heard and that I had a seat at the table. In particular, I had the chance to openly ask Benoît Potier questions, in a transparent manner, at our SCC meetings. It was a great honor. I also appreciated the depth and diversity of the committee members, in terms of age, background, expectations and more. Working with people from different walks of life and generations is an inspiring experience. Our proﬁles complemented each other and gave us a more creative and broader perspective. Was there an initiative that particularly caught your attention? During our meetings, we would address a wide range of topics, such as Air Liquide’s communication tools or the use of social media to target a younger audience. But it was the share ownership events that Air Liquide participates in, such as Investir Day, that really stood out for me. It was an opportunity for participants to meet and talk to the Group’s experts on Air Liquide’s projects and capacity for innovation. As one of the younger Shareholders, how did you contribute in that respect? By striving for a greater emphasis on communicating via digital channels, with a stronger presence on social media. The goal is to reach young people who, nowadays, are more readily focused on crowdfunding and don’t necessarily think about investing in a future-oriented company like Air Liquide. Indeed, the role of the SCC is to put share ownership into the hands of the people and to dispel the perception held by young people that it is institutional or overly formal. Air Liquide is doing its utmost in this regard. Dialogue with Shareholders is at the heart of the Group’s philosophy The Shareholder Services Department, which counts around 40 experts, maintains a privileged shareholder dialogue on an ongoing basis. In addition, the online Shareholder Portal was revamped in 2021. More intuitive, it offers a clearer presentation of the various elements related to stock market transactions. It also allows registered Shareholders to have a consolidated view of their portfolio and to follow its evolution, and brings together the various account documents of direct registered Shareholders. Shareholding has never been so simple! 61 The SCC: A voice for Shareholders In 1987, Air Liquide was the ﬁrst company to establish a SCC. Chaired by the Group’s CEO, Benoît Potier, the committee meets three times a year and each member is appointed for a three-year term. On the agenda: meetings, discussions with internal and external experts, and active participation in Shareholder communication projects. The General Meeting: THE highlight of Shareholder democracy In 2022, the Annual General Meeting will once again be held in-person. However, it will also feature a new digital dimension, in particular thanks to optimized replay. Air Liquide will then hold a regional Shareholders’ meeting on May 12 in Lille, France. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 61 25/03/2022 18:21 Joining forces to build powerful ecosystems ecosystems 62 Glenn Llewellyn is Vice President, Zero-Emission Aircraft at Airbus. He began his career as an engineer at the company in 2004, working on the A350. He then headed up Airbus’ Research and Technology portfolio dedicated to reducing the climate impact of its products. He is widely recognized as a leader on climate strategy for aviation. 03_ALRA2021-RA_GB_bat4.indd 62 28/03/2022 18:08 In partnering with Airbus to help bring the first zero-emission hydrogen aircraft to the skies by 2035, Air Liquide is deepening a historic partnership where the Group both brings and gains expertise. Promoting hydrogen on the global stage Convinced that hydrogen will be one of the drivers of the energy transition, leaders from the energy, transport and industrial sectors decided to join forces in 2017, under the impetus of Air Liquide and Toyota. Their objective: promoting a long-term vision of hydrogen technologies and usages, and stepping up its large-scale deployment. Today, the Hydrogen Council includes over 130 executives from large international ﬁrms that participate along the entire hydrogen value chain, as well as investment companies. Momentum is building around hydrogen, with adoption set to rapidly expand in the coming decades. What role is it going to play in the aviation sector? At Airbus, we believe zero-emission aviation is the future, and the widespread adoption of hydrogen is critical to securing this. As investment increases across countries and sectors, hydrogen will become a competitive and sustainable fuel source. Our ZEROe concept aircraft enable us to explore a variety of conﬁgurations and hydrogen technologies that will shape the development of our future zero-emission aircraft. Our goal is entry-into- service by 2035, and for that to become a reality, the development of the necessary hydrogen infrastructure at airports also needs to match our pace. Why did you choose Air Liquide as a partner for the ZEROe project? A more sustainable future for aviation cannot be achieved alone, so we have been reaching out to partners with complementary expertise. Air Liquide is a long-term partner that has a storied reputation for innovating and delivering, and they have the right hydrogen expertise and technologies needed to help Airbus deliver on our ZEROe ambition, both on the ground and on board. Air Liquide also challenges us in a constructive way, which strengthens our ability to bring a winning solution to market. At their core, Airbus and Air Liquide are strategically aligned and we are both fully committed to building a more sustainable future for aviation. How is Air Liquide directly contributing to this initiative? Air Liquide teams are leveraging their expertise and technologies in hydrogen storage, production and distribution to help us design the on-board aircraft technologies for adapting liquid hydrogen to aviation uses. On the ground, they are also playing a key role in the development of hydrogen hubs at airports, working with key operators like Groupe ADP and VINCI Airports to map out the future of hydrogen airport infrastructure. 63 Setting sail toward new hydrogen solutions Traveling the world to demonstrate the key role of hydrogen in the energy transition is the mission of Energy Observer, the ﬁrst energy-independent laboratory ship for zero-emission navigation. Air Liquide has been involved in this adventure since 2017, helping raise awareness around energy transition challenges. Energy Observer recently took a new step forward with the design of a cargo ship powered by liquid hydrogen. This initiative is being carried out in collaboration with Air Liquide as part of a partnership reinforced in 2021. The aim is to decarbonize maritime transport, which accounts for 3% of global annual CO2 emissions. Air Liquide 03_ALRA2021-RA_GB_bat4.indd 63 28/03/2022 18:09 Helping start-ups grow 64 Hugo Cence is co-founder and CEO of Intact, a start-up that develops ultrasonic and 3D quality control tests for industrial equipment. After studying material and structural mechanics, he worked in the Middle East and then in Marseille, France, in the R&D laboratory of an engineering company. In 2015, Hugo joined Ekoscan,(1) along with a friend from his graduating class with whom he founded Intact in 2021, in cooperation with ALIAD, the venture capital investor of Air Liquide. 03_ALRA2021-RA_GB_bat2.indd 64 25/03/2022 18:21 Alongside industrial and academic partners, Air Liquide is also working with start-ups to accelerate its innovation strategy. The goal: to develop the Group’s future technologies and enrich its portfolio of sustainable solutions. Open ecosystem innovation To foster the innovation ecosystems in which the Group has played a major role for many years, Air Liquide relies on its ﬁve Innovation Campuses (Paris, Frankfurt, Delaware, Shanghai and Tokyo), where researchers, customers, academics and entrepreneurs come together to imagine together the solutions of tomorrow, and on its Campus Technologies (Grenoble), which manufactures innovative solutions for its customers. The Group currently has more than 400 academic, industrial and start-up partnerships. 65 Intact develops industrial quality control tests. What does this involve in concrete terms? Using unique technology, we have designed a robot that allows us to model the interior of a structure in 3D, based on ultrasonic tests, without affecting the integrity of the equipment. Our solution enables quality control of all types of metallic or composite structures (pipes, aircraft hulls, etc.). It is currently used on Air Liquide sites, but also by companies such as ArcelorMittal, EDF and ExxonMobil, which see several advantages in the technology: avoiding industrial risks and improving the safety of operators, particularly for maintenance operations at height. We can also provide predictive maintenance using algorithms that estimate the remaining life of equipment. ALIAD, Air Liquide’s venture capital investor, has invested in Intact. What motivated this partnership? To start, there was the meeting between Ekoscan and Air Liquide’s R&D teams in 2015. Together, we developed a customized monitoring solution for the inspection of hydrogen puriﬁcation units and a robot to deploy this technology in an automated manner at Air Liquide’s industrial sites. Then we decided to create the start-up Intact together. This allowed us to structure a collaboration that had already existed for several years. ALIAD participates in Intact’s governance and is helping us to grow faster, for example by taking a minority stake in the Canadian company, Arcanite(2), to make it an exclusive partner and an operational base for development in North America. What does Air Liquide bring you, beyond the ﬁnancial investment? We regularly exchange with their materials engineering experts to better understand the equipment we control. We also learn a lot about equipment integrity from the engineers who design gas production units, especially those related to hydrogen. Commercially, the fact that we have been able to test our technologies in different contexts for Air Liquide enables us to propose very convincing business cases to our other customers. ALIAD: the investor of start-ups of the future Air Liquide Venture Capital (ALIAD) is the venture capital investor of the Air Liquide Group. Since its creation in 2013, it has made more than 35 investments in technology start-ups operating in three key sectors: energy transition, healthcare and digital. Accelair, the Group’s deep tech start-up accelerator Accelair provides start-ups with a tailor-made hosting service and personalized support from Air Liquide experts. In 2021, three new start-ups joined Accelair: Umiami, which uses a unique process to reproduce 100% vegetable meat; Sirius Space Services, which is developing a reusable launcher for nano, micro and mini-satellites; and Carboneo, which offers an innovative process for reducing CO2 emissions. Located at the heart of the Paris Innovation Campus, Accelair houses a total of eight start-ups. (1) Manufacturer of advanced equipment for the industry. (2) Company specialized in non-destructive testing for the industry. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 65 25/03/2022 18:21 Participating in collaborative initiatives initiatives 66 Bertrand Piccard is a Swiss explorer, psychiatrist and pioneer in clean technologies. In 1999, he completed a non-stop balloon trip around the globe, and in 2016 he conducted the same feat in a solar-powered aircraft, the Solar Impulse 2. Chairman of the Solar Impulse Foundation, Bertrand Piccard’s explorations have always been inspired by his commitment to protect the planet. 03_ALRA2021-RA_GB_bat2.indd 66 25/03/2022 18:21 Based on shared vision and expertise, Air Liquide builds enduring relationships with visionary pioneers in sustainable solutions like the Solar Impulse Foundation to spark change in society. Acting within communities Working closely with partners, the Air Liquide Foundation funds both scientiﬁc and community projects that have a positive impact on society. One ﬂagship initiative develops innovative professional integration programs for technical and industrial careers, helping individuals to develop the skills that are in demand in ﬁelds where Air Liquide can bring expertise. Mostly powered by partnerships with NGOs, this initiative empowers young adults without diplomas, jobs or training, especially those from disadvantaged areas, to take control of their own professional destiny. 67 The Solar Impulse Foundation and Air Liquide have been collaborators for 25 years. Tell us about your first meeting. Can you tell us more about this partnership? My ﬁrst contact with Air Liquide was in 1997 when they provided the helium for my balloon and oxygen for the crew during my third attempt to travel around the world. They were already an incredibly performing company that was creating innovative solutions meeting environmental challenges, even at that time. Then in 2016, Air Liquide provided the life support system for Solar Impulse pilots. It was important to ﬁnd a company that could deliver oxygen all around the world and Air Liquide was the perfect partner for that. When I launched the 1000+ Solutions(1) Challenge, they became one of the main partners of my Foundation. How does Air Liquide’s expertise help you in your mission to preserve the environment? Air Liquide is a key player in the Foundation’s Expert Community, an independent group of science, engineering and business professionals. Their experts undertake rigorous and objective assessments of technologies seeking our Efficient Solution Label, which is given to leading processes and products that combine economic and environmental performance. As for now, 30 Air Liquide experts have assessed more than 300 technologies over the course of our partnership. How do you explain the success of this long partnership? The main reason is the convergence of our vision and the quest for excellence. We share the common goal of offering low-carbon and efficient processes, products and services that are economically viable, and we both have fantastic teams and dedicated professionals working hard to make this vision reality. Our partnership is natural. We have recently renewed it for four more years and our shared ambition is to continue to accelerate the adoption of cleantech solutions in the energy sector and beyond. An investment fund dedicated to clean technologies In partnership with Rothschild & Co. and the Solar Impulse Foundation, Air Liquide has created a €250 million investment fund dedicated to the development of high- potential small- and medium-sized companies working on environmentally friendly solutions. This fund invests notably in the sectors of clean energy, clean mobility, agriculture, the circular economy, water management and smart cities. Promoting oxygen access Air Liquide has joined forces with Unjani Clinics to provide widespread access to an integrated, permanent oxygen therapy solution in 92 primary healthcare clinics in South Africa. Under the partnership, medical oxygen will be supplied to the entire Unjani Clinics network and medical staff will be trained to use the equipment. In 2021, 24 sessions were held to train over 100 nurses in the use of this equipment. (1) Bertrand Piccard set a challenge in 2017 to select 1,000 efficient and proﬁtable solutions that protect the environment. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 67 25/03/2022 18:21 Creating more value with our suppliers 68 Andrés Martínez joined Transmol in 2020 as Logistics Director, having worked in logistics since 2002. Fittingly for someone whose job is to keep things moving, Andrés Martínez has seen the world: a trained naval architect, he completed an MBA in Houston, returning to his native Spain to start his career in 1992. 03_ALRA2021-RA_GB_bat2.indd 68 25/03/2022 18:21 To reduce the Group’s carbon footprint from transporting its gases, Air Liquide is partnering with carriers like Transmol to convert their truck fleets to run on alternative fuel sources. Air Liquide wanted to shift the heavy vehicles used to transport its gases to clean fuel sources. Transmol played a key role in this in Spain, can you tell us more about it? We’ve been driving Air Liquide pressurized gas in the industrial market for 10 years. In 2017, we decided to replace diesel trucks at the end of their service life with trucks running on natural gas for vehicles (NGV). Since then, the proportion of NGV trucks in our ﬂeet that serves Air Liquide has risen consistently. 50 out of 55 units have now made the transition to NGV. What were the challenges of changing to NGV, and how did Transmol and Air Liquide work together to surmount them? Air Liquide contacted experts and invested in gathering valuable information before the switch to NGV. They ensured the change would be proﬁtable for us and for them before committing, and they were able to prove it to us with efficiency and safety data. The research carried out allowed us to make the switch with conﬁdence. We were already familiar with the gas itself, as we specialize in transporting large volumes of NGV, and we shared our relevant experiences with Air Liquide as well. We worked together to determine the best roll-out of NGV in our ﬂeet. How has Transmol beneﬁted from this switch? We will soon start to see a positive economic impact from switching to a green fuel like NGV. Operating costs are tipping in our favor as taxes on diesel are rising. We also have improved our own environmental performance, which will beneﬁt us in operational terms as cities in Spain start to impose restrictions on CO2 emissions. Moreover, having trucks running on NGV allows us to avoid harmful particles such as NOx and SO2. This partnership allowed us to create more value for our own company. A lower environmental impact for gases transportation A minor amount of air gases and hydrogen produced by Air Liquide are transported by road - the rest travel either by pipeline or are provided through units directly installed at the customers’ sites. Thanks to the success of delivery optimization programs, efficiency continues to improve as part of the Group’s goal of reducing its carbon footprint linked to gases transportation. The Group aims to convert 20% of its global truck ﬂeet and 50% of its European ﬂeet to alternative fuels by 2025. A sustainable procurement policy Air Liquide endeavors to build sustainable and stable relationships with its suppliers, as part of a culture of mutual trust. The goal is to achieve long-term partnerships and high standards of safety, reliability, competitiveness and innovation, while accommodating ethical practices and sustainable development. These principles are officially recognized via a Supplier’s Code of Conduct and a CSR1 commitment clause in contracts. Safety, a fundamental value Safety is an integral part of Air Liquide’s operational excellence and culture. The Group is committed to efficiently reducing the exposure of its employees, customers, subcontractors, suppliers and local communities to professional and industrial risks, in all circumstances. Air Liquide is working closely with suppliers to improve their road safety records. For instance, onboard technologies such as cameras that can detect driver fatigue are installed in trucks to detect driver fatigue and distraction, help change driving habits when necessary and provide visibility of the vehicle’s surroundings. 69 Air Liquide (1) Corporate social responsibility 03_ALRA2021-RA_GB_bat2.indd 69 25/03/2022 18:21 Performance 2021 70 In 2021, Air Liquide achieved excellent performance, in spite of a complex economic environment. From dealing with the Covid-19 pandemic and the sharp rise in inflation to the challenges of the energy transition, the Group’s teams have stepped up in all areas, demonstrating resilience and great adaptability. 03_ALRA2021-RA_GB_bat2.indd 70 25/03/2022 18:21 A regular long-term performance 2021 key ﬁnancial ﬁgures EVOLUTION OF GROUP REVENUE over 30 years (in millions of euros) 23,335 14,457 4,851 8,328 1991 2001 2011 2021 +5.4% average annual grow th (1) EVOLUTION OF ADJUSTED NET EARNINGS (2) PER SHARE over 30 years (in euros) 5.45 3.58 0.79 1.61 1991 2001 2011 2021 +6.7% average annual grow th (1) EVOLUTION OF ADJUSTED DIVIDEND (2) PER SHARE over 30 years (in euros) 2.90 (3) 1.65 0.26 0.65 1991 2001 2011 2021 +8.3% average annual grow th (1) REVENUE €23,335M + 8. 2% (4) RECURRING NET PROFIT (Group share) €2,572M + 13.3% (5) OPERATIONAL MARGIN 17.8% + 70 bps (6) EFFICIENCY GAINS €430M 71 GEARING 47.5% INVESTMENT DECISIONS €3.6bn (1) Calculated according to prevailing rules over 30 years. (2) Adjusted for the 2-for-1 share split in 2007, for free shares attributions and for the capital increase completed in October 2016. (3) 2021 dividend subject to the approval of shareholders at the General Meeting on May 4, 2022. (4) On a comparable basis (excluding currency and energy effects). (5) Excluding exceptional and signiﬁcant operations not impacting operating income recurring. (6) Excluding energy impact. Air Liquide 03_ALRA2021-RA_GB_bat4.indd 71 28/03/2022 12:00 DISTRIBUTION OF 2021 GROUP REVENUE (in millions of euros) 2021 GAS & SERVICES REVENUE BY ACTIVITY (in millions of euros) DISTRIBUTION OF 2021 GAS & SERVICES REVENUE BY GEOGRAPHY (in millions of euros) 681 (3%) Global Markets & Technologies 387 (2%) Engineering & Construction 2,096 (9%) Electronics 3,706 (17%) Healthcare 717 (3%) Middle East and Africa 4,790 (22%) Asia Paciﬁc 72 9,487 (43%) Industrial Merchant 8,445 (38%) Americas 22,267 (95%) Gas & Services 6,978 (31%) Large Industries 8,315 (37%) Europe INNOVATION (2021 figures) GROUP SHAREHOLDERS (as of December 31, 2021) €304M of innovation expenses including €100M dedicated to the energy transition 354 new patents ﬁled >400 industrial and scientiﬁc partnerships and collaborations with start-ups 67% institutional shareholders 33% individual shareholders €2.90 dividend per share proposed at the AGM of May 4, 2022 505,000 individual shareholders including 117,000 direct registered shareholders, 165,000 intermediary registered shareholders and 223,00 bearer shareholders 03_ALRA2021-RA_GB_bat2.indd 72 25/03/2022 18:21 Environmental, social and governance (ESG) indicators In March 2021, Air Liquide announced the reinforcement of all its sustainable development objectives, which are based on three pillars. Act 8,445 Americas FOR A LOW-CARBON SOCIETY FOR HEALTH IN CONFIDENCE In line with the Paris Agreement, the Group’s goal is to achieve carbon neutrality by 2050, with two major intermediate steps: by 2025: begin to reduce CO2 emissions in absolute value; by 2035: -33%(1) decrease in CO2 emissions from scopes 1 and 2, compared to 2020. Additionally, Air Liquide maintains its objective of reducing the Group’s carbon intensity by 30% by 2025(2) compared to 2015. by improving the quality of life of patients with chronic diseases in advanced economies, and by facilitating access to medical oxygen in low- and middle- income countries. 1.8Mpatients were cared for at home by Air Liquide in 2021, including 38% who are following a personalized care pathway, which amounts to 671,000 patients. 1M people in low- and middle- income countries had access to medical oxygen. by engaging with employees and building best-in-class governance practices. 73 31% of engineers and professionals in 2021 were women. Air Liquide is aiming for 35% of engineers and professionals to be women by 2025. 34% of employees beneﬁted from the common basis of care coverage in 2021, with a target of 100% coverage by 2025. 1.1 Accident frequency rate.(3) Slight increase compared with 2020 (0.9), which was the lowest rate in 20 years, in line with the strong business recovery in 2021. (1) In tons of CO2-equivalent, restated to include from 2020 and each following year the full-year emissions of assets acquired and integrated after 2020, scopes 1 and 2. Scope 2 emissions calculated from the speciﬁc supplies (market-based): the Group hence adopted the methodology recommended by the GHG Protocol. (2) In kg CO2-equivalent/euro of operating income recurring before depreciation and amortization at 2015 exchange rate and excluding IFRS 16, with scopes 1 and 2 of reported greenhouse gas emissions, applying the “market-based” method for the scope 2. (3) With work stoppages per million hours worked. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 73 25/03/2022 18:21 Our proﬁle Our business model ~ 64,500 committed employees in 78 countries Long-term vision and sustainable growth strategy Extensive scientific and technical expertise in industrial gases (oxygen, nitrogen, hydrogen, etc.) >3.8M customers and patients 4,500 employees contributing to innovation 5 Innovation Campuses 1 Campus Technologies 13,500 patents 2 industrial gases production modes Centralized production On-site production at customer sites 3 industrial gases distribution networks >9,700 km of pipelines for large quantities ~20 million cylinders for small quantities ~9,900 trucks for medium quantities A wide range of customers and applications Major ability to innovate Long-term customer contracts, indexed to energy prices Management and optimization of production and distribution chain Active involvement in new markets Global presence and local activity 74 A world leader in industrial gases and related services A unique model 03_ALRA2021-RA_GB_bat2.indd 74 25/03/2022 18:21 Our activities Supporting almost all economic sectors LARGE INDUSTRIES Industrial gases in large quantities in the framework of long-term partnerships Chemicals Reﬁning Metals 30%(1) INDUSTRIAL MERCHANT Materials & energy Industrial gases in small and medium quantities, application technologies, small equipment and related services serving a wide range of customers 40%(1) Automotive & fabrication Food & pharmaceuticals Technology & research Entrepreneurs & distributors ELECTRONICS Ultra-pure gases in large quantities and development of new molecules 9% (1) Semiconductors Flat panels Photovoltaic 75 HEALTHCARE Medical gases, products and services to support patients and customers in the hospital and at home 16%(1) GLOBAL MARKETS & TECHNOLOGIES Molecules, equipment and services to support the energy transition and deep tech(2) markets 3%(1) ENGINEERING & CONSTRUCTION Plants and equipment for industrial gas production 2%(1) Hospitals Home healthcare Specialty ingredients Energy transition Deep tech(2) Customers choosing to insource their industrial gas needs (1) Percentage of 2021 Group revenue. (2) Disruptive technologies based on scientiﬁc breakthroughs that can fundamentally change design and production methods. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 75 25/03/2022 18:22 Consolidated income statement (summarized) AS OF DECEMBER 31, 2021 (in millions of euros) Revenue Operating costs Operating proﬁt before depreciation Depreciation and amortization Operating income recurring Other non-recurring operating income & expenses Operating income Net ﬁnancial costs and other net ﬁnancial expenses Income taxes Share of proﬁt of associates PROFIT FOR THE PERIOD 76 - Minority interests - Net proﬁt (Group share) Basic earnings per share (in €) 2020 20,485 -14,557 5,928 -2,138 3,790 -140 3,650 -440 -678 -4 2,528 93 2,435 5.16 2021 23,335 -17,002 6,333 -2,173 4,160 -150 4,010 -408 -915 5 2,692 120 2,572 5.45 03_ALRA2021-RA_GB_bat2.indd 76 25/03/2022 18:22 Consolidated balance sheet (summarized) AS OF DECEMBER 31, 2021 Assets (in millions of euros) 12/31/2020 12/31/2021 Goodwill Fixed assets Other non-current assets(1) Total non-current assets Inventories and work in-progress Trade receivables and other current assets Cash and cash equivalents(1) Total current assets Assets held for sale TOTAL ASSETS 13,087 21,401 1,123 35,611 1,406 3,033 1,836 6,275 91 41,977 13,992 23,984 1,216 39,192 1,585 3,611 2,311 7,507 84 46,783 Equity and liabilities (in millions of euros) 12/31/2020 12/31/2021 77 Shareholders’ equity Minority interests Total equity Provisions and deferred tax liabilities Non-current borrowings Non-current lease liabilities Other non-current liabilities(1) Total equity and non-current liabilities Provisions Trade payables and other current liabilities Current lease liabilities Current borrowings(1) Total current liabilities Liabilities held for sale 18,543 462 19,005 4,290 10,220 969 218 34,702 316 4,462 218 2,240 7,236 39 21,462 537 21,999 4,419 10,506 1,033 382 38,339 309 5,614 228 2,256 8,407 37 TOTAL EQUITY AND LIABILITIES 41,977 46,783 (1) Including fair value of derivatives. Air Liquide 03_ALRA2021-RA_GB_bat2.indd 77 25/03/2022 18:22 Consolidated cash ﬂow statement (summarized) AS OF DECEMBER 31, 2021 (in millions of euros) Funds provided by operations Changes in working capital Other cash items Net cash from operating activities Purchases of property, plant and equipment, and intangible assets Purchases of ﬁnancial assets and the impact of changes in scope Proceeds from sale of subsidiaries, property, plant and equipment, and intangible and ﬁnancial assets Net cash in investing activities Distribution Increase in capital stock Purchase of treasury shares 78 Transactions with minority shareholders Change in borrowings and lease liabilities (including net interests) Impact of exchange rate changes and net debt of newly consolidated companies and others Change in net cash and cash equivalents NET CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 2020 4,932 364 -90 5,206 -2,630 -129 804 -1,955 -1,387 44 -50 -16 -1,019 -1 822 1,719 2021 5,292 377 -98 5,571 -2,917 -660 225 -3,352 1,418 175 -40 -37 -497 17 420 2,139 03_ALRA2021-RA_GB_bat2.indd 78 25/03/2022 18:22 A I R L I Q U I D E .C O M See our annual publications on our website: Annual Report, Sustainability Report, Universal Registration Document, Shareholder’s Guide, Interactions. YO U T U B E L I N K E D I N T W I T T E R Air Liquide Corp channel linkedin.com/company/airliquide @AirLiquideGroup Complimentary copy. Published by the Communications department of the Air Liquide Group, 75 quai d’Orsay, 75007 Paris, France Publication Director: Benoît Potier. Editor: Alexandra Rocca. Date of publication and legal deposit: March 2022. ISSN: 2803-6220. Photo credits: in order of appearance, p. 1: Julien Lutt/Capa Pictures, p. 2-3: Energy Observer Productions/Antoine Drancey, p. 4: Antoine Doyen, p. 6: François Roelants, p. 9: Gorodenkoff/Getty Images – Wayne Eastep/Getty Images – Sinology/Getty Images – Betsie Van Der Meer/Getty Images, p. 11: Antoine Doyen – Julien Lutt/Capa Pictures – Carlos Crespo/Capa Pictures – Olga Kolleeny/ Capa Pictures – Laurent Attias, p. 12: Franck Juery, p. 13: Franck Juery – Mourad Mokrani – Terry Halsey, p. 14-15: Tim Robberts/Getty Images, p. 18: Mourad Mokrani, p. 19: Air Liquide, p. 20: Adrien Daste – Sasol, p. 21: Air Liquide – Bertrand Holsnyder, p. 22: Olive/Getty Images, p. 23: Eternity in an Instant/Getty Images – Bim/Getty Images, p. 26: Julien Lutt/Capa Pictures, p. 27: Julien Lutt/Capa Pictures, p. 28: Adrien Daste – portishead1/Getty Image, p. 29: Sophie Loubaton/Capa Pictures – vgajic/Getty Images, p. 30: Pyrosky/ Getty Images, p. 31: BirdHunter591/Getty Images – Adrien Daste, p. 34: Christopher Jue/Capa Pictures, p. 35: David Wang/Air Liquide, p. 36: Adrien Daste, p. 37: Narumon Bowonkitwanchai/Getty Images – Philippe Roy/Getty Images, p. 38: Artur Debat/Getty Images, p. 39: Bloom Productions – Adrien Daste, p. 42: Mourad Mokrani, p. 43: Aaron Auyeung, p. 44: tomasworks/Getty Images – Pau Hana Productions, p. 45: jonathanfilskov-photography/Getty Images – AzmanJaka/Getty Images, p. 46: Maskot/Getty Images, p. 47: Thijs Wolzak – d3sign/Getty Images, p. 48-49: Amparo García/EyeEm/Getty Images, p. 50: Olivier Guia/CryoConcept, p. 51: Akiromaru/ Getty Images, p. 52: Eduard Muzhevskyi/Science Photo Library/Getty Images, p. 53: South_agency/Getty Images, p. 54-55: Franck Benausse/Le Square, p. 56: Arnaldo Kikuti, p. 58: Yann Manac’h/Capa Pictures, p. 62: Hervé Gousse, p. 64: Laurent Cipriani/Capa Pictures, p. 66: Thomas Hensinger/Solar Impulse Foundation, p. 68: Gianfranco Tripodo/Capa Pictures, p. 75: Adrien Daste – Air Liquide – Sanjeri – Olivier Fernandez/IStock – Thomas Cortesi – Alexandre Aldavert. Design and production: (ref.: ALRA021) Printers: FOT Imprimeurs. This document is printed on FSC-certified paper sourced from sustainably managed forests by an Imprim’Vert-certified printer. L’Air Liquide - S.A. company established for the study and application of processes developed by Georges Claude with issued capital of 2,614,100,703.50 euros. A world leader in gases, technologies and services for industry and health, Air Liquide is present in 75 countries with around 66,400 employees and serves over 3.8 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. 2021 Annual Report At the heart of the future 00_ALRA2021-RA_GB_couv_bat2.indd 1-3 25/03/2022 18:15 Arnaud, employee at Air Liquide France Industrie

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