L'Air Liquide Ord

Good morning, ladies and gentlemen, and welcome to the Early Kid 2023 results conference call. All participants are in listen-only mode until we conduct a question-and-answer session, and instructions will be given at that time. I would now like to turn the conference over to Early Kid team. Please begin your meeting, and 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 performance of full year 2023. For the Q&A session, they will be joined by Mike Graf and Pascal Vinet, both executive VPs overseeing many, respectively, Americas and Europe and Africa Middle East. In the agenda, our next announcement is on April 24th for our first quarter revenue. Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It is my great pleasure to be with you today to share the highlights of 2023, which was another year of strong performance for Air Liquide. Let's start first with the financial highlights of our performance on slide three. Building on the trends of our model, all our performance KPIs are, again, very well oriented, especially given the macroeconomic and geopolitical context. On the top line, sales grew 4% on a comparable basis. OER margin improved by 80 basepoints, excluding energy pass-through, which is a remarkable performance in the current environment. This is now 150 basepoints in the first two years of advance. Almost 160 basepoints set as the ambition for the full four-year plan. We also achieved plus 13% of recurring net profit growth at constant exchange rate, demonstrating a strong leverage on sales. This is also reflected in the cash flow, growing plus 13% at constant exchange rate. And last, but not least, the recurring ROCE improved again to reach 10.6%, fully aligned with the advanced objective of a ROCE above 10%. As you can see, we are steadfast in our commitment to deliver profitable growth regardless of the macroeconomic conditions. This is a strength of Air Liquide. Our efforts to deliver a significant margin improvement in 2033 are bearing fruit. Slide 4 highlights the reliance on two key operational levers for this achievement last year. First, IAM pricing. which increased again significantly at 8% in 2023, coming on top of the plus 15% delivered in 2022. This active pricing management is continuing and will continue in all regions in 2024. Second, efficiency, which reached a record level above €460 million, which is 23% higher than last year. Many actions launched in 2023 will continue to deliver efficiencies in 2024, and we are actively launching new ones. Beyond these key enablers, a real delivery mindset is driving the teams worldwide, and it plays a crucial role in terms of strong execution. I would like to warmly praise our 67, 800 team members for their great achievements. Turning now on slide five, As part of the strategy, we are positioning ourselves very well to continuously secure profitable growth. Indeed, we managed to sign several major investment projects in energy transition and electronics, which are two main growth accelerators. In energy transition, to name a few projects under construction, the 200 megawatt electrolyzer in Normandy, in France, The carbon capture cryocap unit added to our steam methan reformer in Rotterdam, which will be part of Portos, Europe's largest CCS infrastructure. In Canada, the low-carbon gas production platform we mentioned already in our Q3 conference call, and not to mention the electrification of two air separation units in China. In electronics, We also have many projects starting construction or going through startup, mainly in Asia or in the US. As a result, the investment backlog has grown 50% compared to 2019 and reached a record high level in 2023 at 4.4 billion euros, a clear acceleration for the future. This is fully aligned with the 16 billion of investment decision planned for the four years of advance. And while we prepare for the future, we remain very disciplined in our investment decisions to maximize value creation. Beyond our high investment decision signings and robust backlog, we are actively pursuing well-developed projects and partnerships providing a deep pool of growth opportunities for the midterm. I am now on slide six. So far, 19 energy transition projects have been awarded EU funding, seven projects eligible for sales of equipment and technology through our ENC activity, and 12 large industry projects representing 2.7 billion of capex have been awarded. Among them, two projects have recently been signed and are now included in the backlog. One other, Electrolyzer, has even started. The remaining nine projects are on the move to final investment decision and represent more than 2 billion euros of capex. In particular, we signed memorandum of understanding with cement and lime production companies, and these projects are developing very well. We have also been very successful in the US, being named as partner in six out of the seven clean hydrogen hubs. We are also very actively pursuing and developing projects in electronics, especially given the reshoring trend in the U.S. and in Europe. In advanced materials, 200 million U.S. dollars of capex are being invested in new production centers in Taiwan and South Korea, close to our Asian customers. They will be ready when these markets will pick up. We are also making progress in hydrogen... signing joint ventures and memorandum of understanding to foster the use of hydrogen for heavy duty in Europe with total energies, in Asia with low-tech chemicals, or in the U.S. with trillium. In Japan, with ENEOS to support the development of low-carbon hydrogen all along the value chain. So as you can see, all these projects offer a very significant reservoir of growth. I should say that I am, with the team, very pleased that we achieved this very strong financial and business development performance while making very clear progress on our advanced CO2 emission roadmap. I am now on slide 7. In 2023, we hit the milestone. This was the first year that we reduced our scope one and two of CO2 emission by 1.8 million tonnes or minus 5%, while managing to grow our sales by plus 4%. This achievement gives us confidence for achieving our near-term goal of emission inflection in 2025. As you will recall, the fundamental part of our decarbonisation plan focuses on three levels. First, carbon capture, with the example of Porto's project that I already mentioned. Asset management, second, with the example of Normandy Electrolyzer, a new technology to produce low-carbon hydrogen. And third, low-carbon electricity sourcing. In 2023, another 1.5 terawatt hour of low-carbon electricity has been sourced, representing a reduction of 1.2 million tons per year of CO2 emissions when all sources will be online. The Advance 3.0 roadmap is also about social KPIs. As an example here, we made very good progress on common care coverage for our employees, moving from 40% in 2022 to almost 80% in 2023. And we remain fully committed to be at 100% in 2025. In gender diversity, we lead the industry by far. To conclude, I want to reiterate our commitment to create value for our shareholders. In 2023, the market recognized our strong value creation and Air Liquide share price was up by 33%, twice as much as the CAC 14. And I believe we will continue to demonstrate that our future prospects for growth are better than ever. Additionally, we are committed continuously to reward existing shareholders. We propose to the vote of the General Assembly a dividend per share of €3.2 in 2024. It's an increase of 8.5% and provides an average DPF growth over 8% for the last 20 years. In addition, the Board of Directors has decided to consider a 1 for 10 free share allocation in June 2024 that will of course result in associated dividends for these free shares from 2025. The annual turnover, sorry, the annual total shareholder return over 20 years has improved now to 12.6% showing our commitment to shareholder value over the long term enabled by our resilient and growth business model focused on sustainable growth. Leaving here the 2023 performance, I would like to finish by turning to the upgraded ambition for Advance. I am on slide nine. The first two years of the four-year Advance plan have fully confirmed the strategic directions. Today, we are fully confident to confirm the three Advance targets on sales growth, ROCE, and CO2 emission trajectory. We also confirm our investment ambition for investment to be decided over the 2022-2025 period. And remember, this is plus 50% compared to the last period. As a matter of fact, given the strengths of our portfolio, we may over-deliver on these objectives. At this stage, we keep it as an upside to stay selective. Finally, regarding margin improvements. we have almost met the initial ambition halfway through the four-year strategic plan. So, based on this strong performance, we are raising our ambition to 320 base points of margin improvement over four years, excluding the energy impact. This doubles our initial ambition, which we first disclosed two years ago. This acceleration shows our strong commitment and confidence in our ability to deliver solid performance. I will stop here and ask Jerome to drive you through our 2023 financial performance. Jerome, please.