L'Air Liquide Ord

Good morning, ladies and gentlemen, and welcome to the iLiquid 2022 results conference call. All participants are currently in list and mode. Only until we conduct a question and answer session and instruction will be given at that time. I will now hand over to the iLiquid team. Please begin your meeting. I will be standing by.

Good morning, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you very much for attending the call today. Francois Jacob and Jérôme Pelleton will present the full year 2022 performance. For the Q&A session, they will be joined by Mike Graf on the phone from the US. Pascal Vinet, Senior VP in charge of the Europe Industries and the Africa Middle East, is in the room with us in Paris. In the agenda, our next announcement is on April 27th for our first quarter revenue. Let me now hand you over to François.

Thank you very much, Aude, and good morning, everyone. It is my pleasure to be with you today to share the highlights of 2022, which was another very good year for Air Liquide. So what are key takeaways of 2022? First, a strong performance. the increased attention and discipline that we have put on bottom line contributions is paying off. We were able to adapt quickly to unprecedented situations in terms of pricing agility, strict cost control, rigorous energy management, to name but a few key achievements. Some indicators that we will see next are demonstrating this clearly. Second, in 2022, we successfully deployed ADVANCE our strategic plan. Having a structured roadmap well rooted in key market trends help us in turbulent times to stay on track. It provides clear priorities and reinforces the resilience of the business model. Third, our value creation strategy encompasses all stakeholders. In that context, we strengthen our leadership with significant progress in energy transition while being firmly on track to deliver on our ambitious ESG roadmap. Let's look at numbers on page four. In 2022, we have achieved a strong comparable sales growth of plus 7%, but also a 70 base point margin improvement, excluding energy pathway impact, and despite an inflationary context. If you recall, We deliver a 50 base point in the first half and we accelerated our efforts in the second half of the year. We are demonstrating our strong commitment to steadily improve our overall profitability regardless of the environment. We also achieved 17% of recurring net profit at constant exchange rate, a good performance and a strong leverage. At 10.3%, Our advanced objective of having a recurring ROCE above 10% is achieved one year ahead of the plan. And last but not least, the operating cash flow on sales, excluding the energy impact, improved by 110 base points. This strong performance was delivered despite an adverse environment, which shows, once more, the resilience of our business model and the agility of our teams. On page five, as you can see, we are delivering on our commitments. We are ahead of advanced trajectory on two of the three main objectives. First, comparable sales growth, and then return on capital employed. And the third objective on CO2 emission is on track with the plan. This achievement was possible thanks to the highly engaged teams worldwide that I would like really to praise here this morning. And thanks also, of course, to a strong business model delivering resilient growth. As part of our strategy, we are positioning ourselves very well for the future. I am now on page six. We seized significant growth opportunities in 2022 with an outstanding $4 billion of decided investments. Keep in mind, it's a record level. Over the last five years, investment decisions were between 3 and 3.7 billion of euro. This is fully in line with the 16 billion investment plan for the four-year advance plan. Electronics projects represent more than 1 billion of these signed investments in 2022 and a significant share of the backlog. These projects will provide recurring cash flows and will fuel the future of the growth. Innovation also plays a key role in project signing. In particular, among all industrial companies, we have been at the very top in terms of European funding for energy transition, demonstrating the quality and innovation content of our projects. And also, for example, we have been recognized worldwide as the number one international patent holder for hydrogen production and distribution. This demonstrates the fact that we are one of the companies which has the potential to create value through innovation in the energy transition. Energy transition projects, by the way, are already a high share of the project decision in 2022. And on slide seven, let me recall just a few tangible business successes last year. So first, as already mentioned, seven major European projects, either linked to CCS or hydrogen production by electrolysis, and representing more than 1.8 billion euros of accumulated investment, have been approved for European fundings and are underway. On top of these projects, we signed more than 40 OxyCombustion projects, typically LuxPulk or small on-site contracts. Here we provide proprietary solutions to reduce our customer consumption of natural gas in a context of the surge of energy prices. We pursued the development also of our biogas activity in Europe, in the US, and we have signed our first unit in China last year. 2022 was also a year of major flagship projects. For example, we are creating the first industrial pipeline systems with all, I would say, shed of hydrogen by adding blue and green hydrogen production units on three of our existing pipeline systems in Germany, France, and Benelux, Netherlands. Another example is the first of its kind, large quantity biohydrogen production for total energy, new biorefinery in France, producing sustainable aviation fuel in a circular economy scheme. We also signed seven partnerships and operational joint venture with major industrial actors in hydrogen for road mobility, aviation, or CO2 transportation. This shows that Air Liquide is a recognized leader in the energy transition by trusted partners. The introduction of the Inflation Reduction Act in the US is now creating new opportunities. As in Europe, Air Liquide is well positioned in the U.S. to pick the best projects, being number one in the industrial gas market with an extensive pipeline network. Additionally, our in-house technologies are very well adapted to the specificities of the projects in the U.S. On slide eight now, I would like to emphasize that Air Liquide is on track with its CO2 emission trajectory. defined as a major objective in advance. Indeed, we delivered a stable CO2 emission trajectory for the second year in a row. The slide is a recall of what was presented during the Sustainability Day in 2021 with the three levers of our plan, each of them weighting around one third. We highlighted here a few actions we took in 2022. First, Under the umbrella of asset management, investments have been decided with customers to switch from steam-driven to electricity for some of our air separation units in China. This will contribute already to the reduction by 1% of the group's CO2 emissions. Regarding actions taken to decarbonize our existing assets, we have been selected for subsidies to equip three of our hydrogen steam methane reformers with carbon capture units. The third category is low-carbon electricity sourcing. We signed four major PPAs in 2022 and made great progress in sourcing more than 400 megawatts of renewable electricity at the Cecil site in South Africa. Altogether, actions decided in 2022 will deliver a reduction of more than 1.5 million tons of CO2 per year. Our efforts are recognized by external rating agencies and through the first validation in the industry by SBTI of our CO2 emission trajectory. We show a global leadership in ESG. Indeed, our ESG commitment in advance go beyond CO2 emissions trajectory. I am now on slide nine. Regarding employees, safety remains the first priority. And we have encouraging results here with more than 10% reduction in last time accidents. Also, more than 40% of our employees benefit now from a common basis of care coverage, well on track to reach 100% in 2025. We are acting also for global society, providing access to medical oxygen to 1.8 million of patients in low and middle income countries. reaching 800,000 more people compared to last year. Finally, we put in place a new governance, splitting the role of chairman and CEO. Please note that a call dedicated to sustainability achievements and objectives will be held on March 24. I would like to conclude by reinforcing our commitment, commitment to value creation for our shareholders on slide 10. We propose to the vote of the General Assembly dividend per share of 2.95 euro in 2023. It's an increase of 12% that takes into account the rise of the nominal dividend amount and, of course, the free share attribution in 2022. It compares with the 8% average DPS growth over the past 20 years. The total shareholder return over 20 years reaches now 12%, showing our commitment to shareholder value over the long term. I will stop here and ask Jérôme to present our financial performance. Jérôme.