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The
industrial gases company, which presented a new strategic plan
to investors and analysts in London, said it was seeking revenue
growth of 6-8 percent annually between now and 2020. It pledged
to deliver a return on capital employed (ROCE) in excess of 10
percent "after five to six years".
Air Liquide's ROCE, a measure of profitability, stood at 10.3
percent in 2015, short of a target of a 12-13 percent return
under its previous multi-year scheme.
Shares in Air Liquide, buoyed in the past by steady growth in
net profit and dividends, were down 3.6 percent at 90.14 euros
at 1050 GMT.
Air Liquide bought Airgas, the leader in U.S. packaged gases, in
a $13.4 billion transaction finalised in May.
When the deal was announced last November, analysts said it
would help Air Liquide to overtake rivals Linde AG, Air Products
and Praxair to top spot in North America and speed
diversification away from slow-growth Europe. However, they
questioned the hefty premium the company was paying..
"The purpose of this event (in London) is to attract investors
not only to buy Air Liquide shares but also to participate in
the upcoming capital increase in the magnitude of 3-3.5 billion
euros (...) part of the financing of the Airgas acquisition,"
Kepler Cheuvreux said in a note to clients.
"We maintain our 'Buy' rating on the stock, although we admit
that upside from here is moderate," the broker added.
The group said on Wednesday the acquisition would allow savings
of over $300 million while Air Liquide would also achieve other
cost cuts of more than 300 million euros ($332 million) on
average every year.
"The group has acquired a new dimension following the
acquisition of Airgas and thus enters a new phase," Chairman and
Chief Executive Benoit Potier said, adding that he expected
"moderate global growth" over the coming years as well as "major
changes related to scientific and technological advances".
Potier also said Britain's vote to leave the European Union on
June 23 would have a limited effect as group's revenue there
only account for 1.5 percent of total sales.
Under a previous plan set out for 2011-2015, Air Liquide had
sought annual revenue growth of 8-10 percent.
Air Liquide said it would strive to maintain a Standard & Poor's
"A" range credit rating. Following the announcement of the
Airgas acquisition, the rating agency downgraded the group's
rating by two notches to "A-" with a "stable" outlook.
(Additional reporting by Noelle Mennella; Editing by Brian Love
and Keith Weir)
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