Air Liquide Q2 Sales Growth Tops Forecast as Electronics Business Drives Strong Performance

Air Liquide reported stronger-than-expected comparable sales growth for the second quarter, driven by robust demand from its Electronics division, particularly in Asia. The French industrial gases company posted comparable sales growth of 3.5%, surpassing the 2.8% market consensus, highlighting continued momentum in semiconductor-related demand.

Group revenue reached €7.04 billion during the quarter, slightly below analysts’ consensus estimate of €7.09 billion, although reported revenue growth of 5.2% edged above expectations. Gas and Services revenue totaled €6.81 billion, broadly matching analyst forecasts and reflecting steady performance across the company’s core operations.

The Electronics segment delivered the strongest performance, with comparable revenue climbing 9.5%, including an impressive 13% increase in Asia, supported by ongoing investments in the semiconductor industry. Healthcare sales rose 4.4%, while Industrial Merchant revenue increased 3.8%, helped by pricing, which contributed five percentage points of growth. Large Industries was the only business line to decline, slipping 0.3%.

Across regions, the Americas posted comparable growth of 5.2%, Asia-Pacific expanded 4.7%, and Europe, the Middle East, and Africa (EMEA) recorded a more modest 0.7% increase.

For the first half of the year, adjusted EBIT reached €2.89 billion, slightly below analyst expectations but still representing a 6% year-over-year increase. Adjusted EBIT margin improved by 100 basis points, reflecting ongoing efficiency gains. Gas and Services adjusted EBIT totaled €3.05 billion, while its margin expanded by 80 basis pointsfrom a year earlier.

Engineering and Construction revenue rose 8.8% on a comparable basis to €230 million, exceeding Jefferies’ forecast, although remaining below broader market expectations.

Air Liquide also reported a €6 billion investment backlog, up from €5.5 billion in the previous quarter. First-half investment decisions totaled €2.8 billion, while operating cash flow before working capital changes increased to €3.37 billion. Net debt stood at €13.9 billion, equivalent to 2.4 times net debt to EBIT.

The company reaffirmed its goal of improving its operating margin by 100 basis points annually in both 2026 and 2027. Jefferies maintained its "Buy" rating on Air Liquide with a €204 price target, saying the stronger-than-expected sales growth and continued investment pipeline should provide support for the company's share price.