Air Liquide hikes 2025 margin target after full-year beat

By Augustin Turpin and Olivier Cherfan

(Reuters) -French industrial gases firm Air Liquide on Tuesday doubled its 2025 margin target after posting better-than-expected annual operating profit, sending its shares to an all-time high in late morning trading. The supplier of gases such as oxygen, nitrogen and hydrogen to factories and hospitals now targets a 320 basis points (bp) operating margin by 2025, up 100% from the 160 bp it had expected two years ago as part of its ADVANCE strategic plan. "Have we been too conservative? Absolutely not," CEO François Jackow said on a call with journalists, adding that the previous targets were based on historical models.

The company did not provide a precise forecast in operating margin for 2024. Jackow said the group's performance came from offering "value-adding" pricing solutions and optimising operational performance.

Air Liquide hiked prices by 8% in its industrial merchants business last year.

The stock jumped 5.8% by 1101 GMT, hitting a record high of 182.7 euros. Recurring operating income rose 11.4% on a comparable basis to 5.07 billion euros ($5.48 billion) in 2023, above the 5.02 billion euros expected by analysts polled by Vara Research. Air Liquide recorded 5.1% revenue growth in its Gas & Services in North America last year, which accounts for 96% of its business. The French company was chosen in October as a partner for six out of seven planned clean hydrogen hubs by the U.S. Department of Energy, which will allocate $7 billion for the projects within a bipartisan infrastructure law. "These are long-term projects, which will take place over the next 5 or 10 years," Jackow noted, adding that, in the event of a change in the U.S. administration, Air Liquide is "looking at different scenarios, different timetables for the development of these activities".

($1 = 0.9259 euros)

(Reporting by Olivier Cherfan and Augustin Turpin; Editing by Milla Nissi and Bernadette Baum)