Air Liquide Aktie

Good morning, ladies and gentlemen, and welcome to the L'Air Liquide Q1 2026 Revenue Conference Call. [Operator Instructions].

I will now hand over to L'Air Liquide team. Please begin your meeting, and I will be standing by.

Good morning, everyone. This is Aude Rodriguez, the Head of Investor Relations. Thank you very much for attending the call today. Francois Jackow and Jerome Pelletan will present the third quarter revenue. For the Q&A session, we will be joined by Emilie Mouren-Renouard, Group VP, overseeing locations of EMEA, and by Adam Peters, Group VP, CEO of L'Air Liquide North America. Adam is on the phone with us from the U.S.

In the agenda, our next announcement is on July 28 for our half year 2026 results.

Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It's my pleasure to share L'Air Liquide highlights for the first quarter of 2026. This quarter, our performance once again demonstrates the resilience and agility of our business model and our outstanding capacity to grow within a complex global environment.

Business wise, our project backlog has reached a new record high, further securing our trajectory for profitable growth in the years to come.

Let's move to the next slide. The first quarter results clearly underscore the strength of our model. The numbers speak for themselves. Sales grew plus 3.4%, excluding FX and energy, bolstered by the accelerated integration of DIG in South Korea in January, which was originally planned for the course of H1. This overall sales performance confirms our ability to capture growth organically and through acquisitions in key geographies and sectors.

Looking ahead, we remain firmly committed to our margin expansion ambition in spite of the environment. We see this with our operational indicators that are equally strong. IM pricing remained accretive, stepping up sequentially to 3.4% above Q4 last year. This demonstrates our continued discipline and effectiveness in managing value in a demanding macro environment.

Efficiency gains. Our momentum here is excellent. We delivered plus 8% growth in efficiencies over Q1 last year. The significant performance considering this comes on top of the almost 30% step change achieved in 2025. It clearly validates that our major transformation program continues to deliver. Cash flow remains remarkably robust, up plus 7%, excluding currency impact, providing us with the financial flexibility to fund our future ambitions.

Finally, and this is remarkable, our investment backlog reached a new historic peak at EUR 5.5 billion, up from EUR 4.9 billion at the end of 2025. This provides us with exceptional visibility. These are tangible, high-quality projects currently under construction that will fuel our profitable growth as they come online.

In summary, it has been a very solid start of the year, characterized by resilience in our operations, acceleration in our strategic investments, hence, validating our strategy.

Moving to Slide 4. I would like, of course, to address the current geopolitical situation in the Middle East and its implications. While our direct financial exposure is limited as the region represents approximately 1% of group sales, we are managing the situation with the utmost discipline and care. Our response to the challenges is guided by clear priorities, safety first. The security of our 500 employees in the region remains our absolute priority. I can confirm that they are all safe and supported. I would like to thank them very much for their outstanding commitment to continue to support our customers in the region.

Second, operational continuity. Our local assets remain intact and operational. While some are running at adjusted rates we see, once again, the critical nature of our business, supplying medical oxygen to hospitals, maintaining home health care services in Saudi Arabia, for example, or providing essential nitrogen for refinery safety.

Regarding operational challenges. Of course, there is a global helium supply chain. The temporary shutdown of helium production in Qatar affects roughly 30% of the global supply. Having 80% of our global helium volumes contracted with customers, more than any of our competitors, we have to take into account the global shortage early on. In this context, we are operating under a temporary contractual relief and managing the allocation of available volumes taking into account where appropriate, the criticality of specific applications and of course, in full respect of applicable laws.

Keep in mind, these are temporary measures and all contracts remain in place. Leveraging our global footprint, we are optimizing supply from our other sources and utilizing our storage assets, such as our cavern in Germany to minimize the impact for our customers.

Other challenges include for our customers, energy and feedstock availability or the robustness of supply chains for key raw materials. Regarding inflation, while it represents an initial headwind, our proven ability to manage pricing and efficiencies allows us to protect our margins and drive long-term value creation.

Overall, at this stage, we remain confident in our ability to continue to manage the impact of those challenges. In the current context, I will not, and I cannot talk about opportunity. But let's keep in mind that we could see some positive outcomes from the structural shifts that will result on the situation.

In particular, L'Air liquide is uniquely positioned to capture regional shifts in industrial demand as we have a global footprint. Also, we could expect a rebound effect in the U.S. where lower energy cost and manufacturing policy are attracting global industrial production. Here, our unique position in large industries, industrial merchants and electronics is an advantage.

Third, we can anticipate an acceleration of the reshoring trend, with strategic autonomy becoming a priority for our customers and for any place. This is particularly visible in the electronics sectors. It should be seen also in other sectors like what we have experienced for steel in the U.S., but also in Europe.

So over the medium term, this conflict reinforces the role of hydrogen in energy, sovereignty and resilience. As hydrogen was losing momentum with only considering decarbonization. We already see a renewed interest in Europe, in the Middle East and in Asia to consider hydrogen as a fundamental pillar of energy independence and resilience complementary to electrification.

And lastly, the long-term value of being able to provide resilient supply will be probably better appreciated by our customers enabling us to leverage our strong operating reliability.

Moving to Slide 5. In today's volatile environment, our core strengths allow us to continue preparing for the future. Our performance is anchored by structural competitive advantages. Extensive diversification our business model is naturally hedged across geographies, diverse industrial and health care sectors and an extensive customer base. Local and global agility. Despite our global presence, we maintain a decentralized organizational structure, this allows us to remain agile enough to capture regional growth opportunities while leveraging the scale of the group to drive global efficiencies.

Intrinsic resilience. This is the hallmark of our model. It allows us to protect our margins and sustain performance in adverse economic environment and innovation G&A our technological leadership and our ability to listen to our customers remain key differentiators. This allows us to navigate the present environment and continue to proactively build our future. In Q1, there are clear signs of this. We successfully closed the DIG Airgas acquisition ahead of schedule, allowing us to capture the full year contribution of the strategic asset throughout 2026.

As mentioned, our project backlog has reached a historic high of EUR 5.5 billion. It is a significant reservoir of growth that will translate into revenue and earnings. And we are pursuing the group transformation to improve the margin, enhance our cash flow and return to our shareholders. In short, we are leveraging our strength to navigate the current environment, while resolutely preparing the Air Liquide of tomorrow.

Moving to Slide 6. I would like to highlight 2 major project wins this quarter. On the left, we are expanding our presence in the U.S. Gulf Coast through a partnership with Hyundai Steel and POSCO. Air Liquide will invest over $350 million to build a world-class air separation unit and extend our local pipeline infrastructure in Louisiana. This project is a perfect illustration of the industrial reshoring trend currently revitalizing the U.S. market.

By connecting this new local and steel complex to our existing network, we are not only supporting Hyundai Steel joint venture, but also increasing our network density and scale effect. This allows us, for example, to meet also the growing needs of Koch Methanol, an existing customer on the same pipeline. It is a clear example of how our integrated infrastructure creates a multiplier effect for profitable growth while offering the best competitive solutions to our customers.

On the right, we have secured a major electronics project in Hiroshima, Japan. We will invest EUR 200 million to build 2 high-purity carrier gas units for a global leader in semiconductors. This project is critical for the manufacturing of the next-generation chips and reinforces L'Air Liquide's global leadership in electronics.

Our position in Japan is unique, being the only global industrial gas supplier in the national growing market. We have an extensive local footprint with 78 dedicated electronics units and our Electronics Tokyo Innovation Campus. This long-standing presence over 40 years in electronics allows us to partner with our customers and Tier 2 makers on their most advanced technological road maps. These two successes are some contributors to our record EUR 5.5 billion backlog. And stay tuned because there's more to come.

Turning now to Slide 7. In a global environment that remains complex, the resilience of our business model and the agility of our teams allow us to look ahead with confidence. Based on our selling start of the year and the strength of our strategic initiatives, we confirm our guidance for 2026 and margin ambition for 2027.

Thank you very much for your time. I will now hand over to Jerome to provide a deeper dive into our first quarter financial performance.

Thanks, Francois, and good morning, everyone. I will now review our numbers in more detail. So turning to Page 9 for Q1 2026. When you exclude FX and energy, L'Air Liquide delivered a plus 3.4% top line growth, which includes a significant scope contribution of DIG Airgas. As a reminder, the closing of the DIG Airgas was accelerated and now benefits Air Liquide for the full year.

On a comparable basis, we again delivered sustained plus 1.9% sales growth despite the challenging macro and geopolitical environment. As published, we are down minus 3.5% in due to unfavorable FX effect of minus 5.9% and minus 1% of an early pass-through impact.

Turning to Slide 10, strong mid-single-digit growth in the Americas was a driver of comparable gross sales growth of plus 2%, including contribution from DIG, Asia was up plus 8% in an otherwise contrasting market, while EMEA remains stable.

Looking now at the business line, stand correlated to the macro industrial environment continue to steady climb by plus 4%. Electronics and Industrial Merchant were, again, growth driver, contributing plus 3% growth each large industry remains contrasted, as I will describe over the next few slides.

Let's now move to Slide 11, where I will review the Q1 activity for each of our main geographies. The Americas broad growth engine provided a plus 5% increase on a comparable basis. At plus 8%, large industry sales were strong once again. Driven by the U.S., we experienced very high demand on the Gulf Coast pipeline network for both air gases and hydrogen partially, due to the Middle East conflict refineries are now running at full capacity, and we see increases in chemicals. Merchant posted a strong plus 5.3%, driven by robust pricing and resilient volume. Gas volumes were slightly positive, and Harwood showed improvement, albeit still soft. Liquide are going to improve, driven by construction and metal. The shutdown of the Qatar Energy Sourcing starting much had limited impact in Q1.

Growth in Health Care show continued trend at plus 6.6%, driven by sustained high pricing, especially in the U.S., along with the deployment of the value offer in Talyx in proximity care. LatAm further increased the number of home health care patients and also benefited from solid pricing.

In Electronics, the very strong work in carrier gas for new project start-up and ramp-up was offset by high Q1 2025 base in equipment and installation. This latter negative comparison will diminish starting in Q2. Overall sales in EMEA now were flat, but with continued solid growth in health care. Large industry was soft with low hydrogen and Cogen. Airgases were stable with high activity in South Africa compensating for low euro.

In Merchant, overall sales were stable. Overall sales were stable, excluding exceptional sales of rare gases in Q1 '25, pricing increased to plus 1.7%, an acceleration from Q4.

Finally, healthcare growth was robust at plus 4.3%, supported by an increased number of patients in home health care and solid activity in medical gases, which more than offset small divestiture.

Finally, mixed Asia post in Q1. The accelerated closing of DIG Airgas in Q1 contributing meaningfully to growth in Asia, where we have delivered a plus 8% in total on a comparable basis was relatively stable.

In large industry, underlying demand was contrasted with growth in Korea and Japan, but lower volume in Singapore and China following customer turns. Sales in Merchants were low with headwinds from helium and soft, but slightly improving pricing. China was slightly positive, excluding helium with some bolt-on contribution and less negative pricing, bright spots remain mainly by bulk and on-site.

Finally, electric sales improved by plus 5.3%, strong worth in carrier gases driven by start-up and ramp-up as well as steady high advance material.

I want to comment on our Q1 activity by business line on Page 12. In Merchant, we saw increased pricing at plus 3.4% with price management above the cost curve, representing a slight acceleration from Q4. Overall gas volume were even and Hardwood showed improvement with still soft activity in the U.S. Large Industries team was down slightly with strong activity in the U.S., nearly offsetting low activity overall in EMEA and contrasted Asia.

Moving to Page 13. There was again a strong underlying momentum in Electronics at above plus 5%, excluding E&I, sales benefiting from a strong growth engine of carrier gases we start up and ramp up, in particular in Asia and the U.S. as well as solid advanced material performance in Asia. This growth was somewhat offset as E&I sales compared to high Q1 2025. This E&I comparison headwind should moderate in Q2.

Finally, Healthcare saw balanced growth with strong contribution from increased pricing in Medical Gases supported by value offers and an increased number of patients in home health care. This case growth more than offset the small divesture in Europe and Japan.

And now on Page 14. We remain extremely focused on our execution and on delivering our margin improvement ambition, which is based on three pillars. First, Industrial Merchant pricing continue to be dynamic and in fact, slightly accelerated to plus 3.4% as we adapt to inflationary measures and focus on price management above the cost.

Second, to reiterate Francois' comments earlier, momentum in efficiency gains were excellent, building up a record in 2025 with the plus 27% increase, we continue to deliver at EUR 142 million, we delivered plus 8% growth in efficiency over Q1 last year. The dedication of our teams and execution of our transformation program is clearly delivering very strong results.

Thirdly, we're active in portfolio management. We closed a very exciting strategic acquisition of DIG Airgas in South Korea as well as 3 bolt-on in the U.S. and China. United Nation we executed 2 divestitures. We continue to take the mind on the portfolio with a focus on profitable and margin accretive opportunities.

On Slide 15 now, showing our investment KPIs. It was a great start of the year with Q1 investment decisions reaching the high level of EUR 1.5 billion, and this excluding the financial decision related to the acquisition of DIG Airgas in Korea. Industrial, the decision reached an all-time high with several successes in electronics carrier gases project and a major large industry project in the U.S. as of I Identified with 2 examples earlier.

Therefore, Investment Backlog reached a new record high at EUR 5.5 billion. This Backlog is very well diversified, including nearly 75 projects across all geographies and well balanced between large industry and electronics. Finally, our 12 months portfolio of opportunities at high EUR 4.5 billion the current 12 months portfolio consists of around 40% projects in Electronics and one third energy transition. On top of that, the portfolio beyond 12 months remains dynamic and totals above EUR 10 billion.

On Page 16 now, and as mentioned earlier by Francois, for 2026, we remain aligned with our ambition to improve operating margin by plus 100 bps, excluding energy, I'm confident in our ability to deliver our recurring net profit growth at constant exchange rate. We also confirm our further expansion of higher margin improvement in 2027 to reach plus 560 bps of cumulative improvement over 6 years, 2022 to 2027.

Following our February announcement, I am pleased to confirm that with both our Capital Markets Day on October 1, we are eager to use this time to share the next chapter for our strategy.

Thank you very much for your attention. We can now start the Q&A session.

[Operator Instructions] We are now going to proceed with our first question. And the questions comes from the line of Alex Sloane from Barclays.

Two from me, please. The first 1 on large industries, I guess, Middle East disruptions, obviously, tightening global energy and logistics flows. In that backdrop, do you see European industrial customers becoming relatively more competitive versus Asia? And if so, could higher utilization in Europe as well as in North America more than offset any softness that you're expecting to see from Asian customers?

I guess, put more simply, can we expect large industries comp growth to improve over the balance of year from Q1. That would be the first one.

The second one, just on electronics. Obviously, a good mid-single-digit growth rate, excluding E&I. Those comps ease from Q2. Should we expect that kind of reported electronics growth to step up to the mid-single-digit level mechanically?

Or is there anything we should consider from an underlying volume perspective as we think about growth in electronics going forward.

Thank you very much, Alex. So we'll ask Emilie to comment on Europe and probably, Adam will also comment on the large industry momentum that we see in the U.S., and then we come to electronics. .

Emilie, please.

Thank you, Francois. So on the large industry in Europe, I'd say, overall, the activity remains stable and resilient, but it's contrasted depending on the different markets. So if I go a little bit more into detail to answer your question, so on the chemical side, volumes were rather a bit better than Q4, but here it's not a one-size-fits-all story. It really depends on the customers, the places and the feedstock they have access to. So we still see some bubbles or pockets of opportunities where companies benefit from better feedstock, or if they can be flexible to run on different feedstock and that flexibility definitely gives them an advantage to run as opposed to maybe in other places overseas.

In refining, doing well in Q1 with upward volumes, and we expect large players in refining to continue to run at a relatively high load in Q2. And on the metal market, we see good momentum in volumes in Europe driven by the CBAM, and also import protest to incentivize reshoring and production in Europe as opposed to imports from overseas. So these protective measures definitely have a positive impact and that should continue over the remainder of the year.

Thank you very much, Emilie.

Adam, news from the U.S.

Yes, absolutely. Thanks, Francois. And Alex, thanks for the question. Large industry is certainly a bright spot in the U.S. since the start of the year. If you -- maybe a little bit of context for everybody. If you look at our positions in Texas and Louisiana, in particular, we have a very extensive pipeline network in both of those states. So along the U.S. Gulf Coast, extremely strong position serving the chemical industry and refining in particular, but also a bit on the steel side. We've seen that network fill out quite well.

So if you look at what's happening in the Middle East crisis at the moment. The U.S. remains very strong in terms of having advantaged feedstocks for the chemical industry. So natural gas pricing remains favorable, and this is really resulting in chemical company outputs that are increasing. So we've seen that. We've benefited from that. And we continue to see that going into Q2. I think the timing of this will depend on how long it takes things to stabilize in the Middle East, but it's a very strong story there.

We are currently the -- well, we are the leader in serving the chemical industry with air gases, but we also have a very strong position in hydrogen serving refiners. Refiners are also running at max rates. And basically, what we see is the opportunity to really ramp up production in accordance with what's happening. You can see that in our results for the first quarter with 8% growth in Large Industries in Q1.

So a good outlook good position, leveraging our infrastructure that we have and our historic positions and strength in this market.

Thank you very much, Adam, and Alex, and this is true for many of the comments, of course, in the current environment. We have to be a little bit cautious, but just to also put things in perspective. In March, we have seen record volume on oxygen, nitrogen pipeline but also on our hydrogen pipeline in the U.S. So yes, indeed, we are benefiting. We'll see how long it lasts, but I think that's a great position to be in the U.S. for sure.

Regarding the electronics, 2026, indeed, we see a positive momentum, clearly, and a good trend. And we are trading towards the single-digit growth. for the Electronics business, probably more visible towards the second part of the year because there is still a little bit of the comparison effect with the E&I but the underlying growth is very strong. Carrier Gas is in the range of 6%, 7%, 8%, 9% depending on the region or 10%. So when we listen to our customers, clearly, they are providing a positive feedback today, for many of them, the operating rate is in the range of 90% for their fab. And the forecast for 2026 and 2027 is to be above the 90%.

Of course, very strong momentum in the most advanced node logic fabs and the memory where ADT is very strong. As we will discuss probably later on, there are, of course, some questions about the midterm regarding the supply of some critical materials, including helium, but so far, for our customers, this has not been a bottleneck.

Let's keep in mind finally that the investment momentum is super strong. And we have been very successful. In Q1 2026 alone, we have already decided more than 90% of all the electronic investment of last year. So just to put things in perspective, very strong momentum in investment and quite successful track record for us. So this clearly confirms that electronics remains the strong long-term growth driver for L'Air Liquide and that's what we see. Thank you.

We are now going to proceed with the next question. And the questions come from Alejandro Vigil from Santander.

Alejandro Vigil from Santander. The first one is related as well about the organic growth outlook for the year. I think market expectations was some acceleration of the growth during the next quarters. But now we have these Middle East crisis. If you can give us some color about how you see organic growth performing in the coming quarters from this about 2% this quarter. .

And the second question is about the transformation plan. We see this acceleration in cost cutting and the guidance for '26 and '27 Basically, my comment is, if this is a conservative guidance? Or you see more and more upside in these numbers as you are delivering the current plans?

Thank you for your two questions. If we talk about the outlook. As of today, our assumption is that Q2 will be more or less similar to Q1 in terms of growth. We clearly continue to see some positive trends, either globally, health care, for example, semiconductor, I just mentioned about that, but also defense and aerospace. Regionally also, we see some positive trends still in Europe, as mentioned by Emilie, U.S. refining, petrochemical also, but U.S. manufacturing overall and industrial construction.

But of course, there are great uncertainties regarding the outcome of the Middle East conflict. And there are many potential impacts, headwinds, but also, and we have to recognize that tailwinds. And as the new order is unfolding, we said, of course, being resilient, able to leverage the challenges into growth opportunities. This is why Overall, we remain confident for our growth and margin objective for 2026 and 2027. So that's overall the outlook for the rest of the year.

Transformation, Jerome?

Yes, the transformation. Thank you, Alejandro. This is going very much in line with our expectation, and we are moving on this transformation. We are basically not at all at the end of the journey. You saw the very good track record we had during the last two years in terms of acceleration of the vision and margin. We are still moving on very clear and we have a very strong contribution from efficiencies during the first quarter were up plus 8% versus last year. This is, I would say, on top of what we have done last year, which was very significant, plus EUR 600 million of efficiencies.

And there are basically four pillars. We explained that many times. We are streamlining the organization, and we're working on industry-owned initiatives and commercial initiatives, and we're also leveraging our business service centers. We are moving on, and that's clear. When we look at today, the operational efficiency is very much aligned with what we do. If we try to display by levels, about 40% to 50% of the efficiencies in Q1 are coming from operations. So industrial initiatives are paying off streamlining of the organization. We have also a significant acceleration also on procurement, which will be roughly 1/4 of this.

And finally, we are also having the impact of the tax decrease coming from what we prepared last year in terms of restructuring. You see the cash flow is going up plus 7%. There is a strong leverage coming from top line to cash flow. So everything is moving as expected. And as I said, Francois during his introduction and reinforce, we are very much in line with our past 100 basis point improvement for the year and plus 460 for the period 2022 to 2027.So we are moving on as expected.

We are now going to proceed with the next question. And the question comes from the line of Thomas Wrigglesworth from Morgan Stanley.

Two questions, if I may. Firstly, just looking at the merchant pricing, the 3.4%. What's required for the rest of the year for you to fully pass through the higher energy costs that you'll suffer there. And you spoke -- the second question if I may. You spoke to large industries in Europe and the picture there kind of heading into 2Q. But what's the picture in Asia as well?

We hear obviously very mixed signals across the various markets from Southeast Asia being softer in chemicals to China seeing lower run rate. So I'd be very keen to hear how you're thinking about your Asian Large Industries business and the impacts from the Middle East in 2Q?

Thank you very much, Tom, and good morning. I will ask Emilie and Adam to talk about pricing in the two regions, and then we'll come back to the large industry piece.

Emilie, do you want to start with Europe?

Yes, sure. So pricing in Europe. So we've been really proactive in increasing prices in anticipation of any cost increase due to the Middle East prices and to any inflationary pressure. So pricing is ahead of the cost curve, leading to a good back through. Actually, in Q1 this year, it's a bit higher than Q4. So we've seen this acceleration already, and we'll continue to see that over the next quarter. We've learned from the previous crisis, for sure, we are now fast. We have the tools, we have teams well equipped and well incentivized to increase prices at a very rapid pace. .

So we've put the right formulas in bulk to reflect our energy piece as well. We know they're effective. So overall, I would say, very good dynamics in Europe in pricing management should continue for the rest of the year.

Thank you, Emilie.

Adam?

Yes. Well, Emilie, I think you did a great job of answering that. I think it's not different in the Americas. If I look at it, pricing remains a very strong lever for us. I think our coverage across all 50 states in the U.S., our density that we have in our merchant business is very, very solid. And the tools that we have in place, the incentive systems and the like make sure that we have put in place very strong proactive pricing to stay ahead of the cost curve in the U.S. and in the other parts of the Americas as well.

So I think the situation remains very much the same as what Emilie mentioned for Europe and a very good lever for us going forward that's really built into the DNA of our company.

Thank you very much. So coming back to the large industry in Asia overall, the growth has been lower maybe than what was expected overall, but it's quite contrasted between the region. You see that we still have a good momentum in Korea and Japan, for example, mostly down was China and Singapore. When we look at the reason for that, most of the reasons are related to customer-specific activities and especially a turnaround maybe some extended turnaround given the overall market condition. But that's what we have seen for Q1.

Now looking ahead, I think we have a mixed signal or things that could impact. There are talks about potential curtailment of either energy supply, natural gas or naphtha, feedstock for some of the customers in the region. So far, we have not seen customers being impacted, not our customers, at least. But this is something to clearly watch for the region. At the same time, for us, we do expect, I mean, the plans we have been turned down to restart. And we have also some new start-ups coming up for the rest of the year. So we do expect, I mean, a much better momentum for Asia, but we have to watch that.

Also when you look at the country mix, let's also keep in mind that when you are looking at the country mix where we operate compared to what has been said and maybe others. We are not really positioned in large industry in some of the countries, which are the most impacted with the energy crisis when you talk about Philippines, Vietnam, Malaysia, for example. Those countries are highly dependent on supply, and there's a significant impact. This is the same in India also, where overall, our merchant and large industry business which is mostly Airgas is quite resilient. So that's the picture, again, for Asia, large industries should come up. But again, in the current environment, we need to be cautious.

Francois, if I can just sneak in just a follow-up. So it feels like merchant pricing is going to be better. Electronics is now moving out of the base effects on equipment and installation, going back to more normal growth rates, large industries, looks like it's lapping at low levels with mixed picture. I therefore, struggle with your 2Q comparable growth looks like 1Q comparable growth that seems very conservative in the light of the picture you're painting from those -- from large industries from electronics and other components.

You're talking globally, you're not talking about Asia?

Yes. Now I'm talking globally. Yes, I'm just looking at the comment you made to the answer to the previous question.

I think overall, in the current environment, I mean, you have to be a little bit cautious in looking at the market read offers. Again, we have a very strong basis. We think that there are some positive trends. But again, as the things are unfolding almost by the hours, you have to look and to anticipate some of the ripple effects. So that's probably, I mean, what is driving the outlook overall for the world in general.

So again, we have strong basis, very strong resilience. I have outlined quite a bit of positive trends, let's see.

We are now going to proceed with the next question. And the questions come from the line of Martin Roediger from Kepler Cheuvreux.

I have two, please. your facilities in Middle East, what happens if they get damaged or destroyed, I think about your Yanbu facility, are you fully covered by insurance?

And if you are covered and in case you receive any insurance payment, will that be booked in operating recurring income or as exceptional item?

And secondly, you talked in your hand out about the increasing role of hydrogen in energy sovereignty, and you mentioned renewed interest in, for example, Europe and in Asia. My question is do you have feedback from governments or companies that there is a concrete action plan to implement more, especially green hydrogen?

Thank you very much, Martin. I will let Emilie answer about the specific question on the Middle East assets.

Well, overall, in the Middle East, as a reminder, we operate in five countries. We have about 500 employees, like Francois mentioned. All our employees are safe and sound, and this is really the priority. The safety of our employees, of course, comes first and foremost.

In terms of assets, so of course, asset integrity is of also a priority of ours. All our customers first, continue their operations, except in Kuwait, and all our plants are running to serve them. None of our plants have been hit or damaged, and again, except in Kuwait, all our plants are running to serve our customers, our patients.

Our largest presence is in Saudi Arabia. It's on the West Coast. So it's where we supply some key customers in the Yanbu area, as you know. And this area is along the Red Sea. So less impacted for sure by the Middle East conflict and by the closure of the Hormuz Strait. And overall, the protection of our assets is, of course, a key priority for the group.

Thank you very much, Emilie. Speaking about the role of hydrogen and the renewed interest, yes, this is something that we are clearly hearing from major stakeholders. Myself, I was in the European Commission even last week meeting two of the main commissioners on these very specific topics. And as you know, I mean, the European Commission is looking at plans to increase the energy resilience in Europe. And I would say hydrogen is on the list because of the very diversified ways to produce hydrogen.

The fact that you can rely on international supply chain, but you can also produce locally hydrogen. And you can use hydrogen in a lot of different forms to complement electrification of industry and mobility. And I think that's a clear example of the resilience of hydrogen in the energy mix.

If you just take the normal projects that we are going to start up later this year, this is a clear example where we used to produce hydrogen with imported natural gas. And with this activity, we will be producing hydrogen using renewable electricity and low carbon electricity being produced locally.

So not only it's reduced the carbon footprint of our customers. But clearly reinforce the sovereignty and in the current pricing, also the cost competitiveness of the solution. So I think there is more than an interest. There are working groups and working teams on that.

I mentioned the European Commission, but they were in India and also in Japan a few weeks ago, same kind of discussion. And again, for the mobility and the industry. And maybe just a last example, I think there are some countries which are already taking up the requirement for FNB or hydrogen in Europe. I know that Belgium is looking at that. And Germany has just passed the plan to increase significantly the percent of low carbon hydrogen in the FNB mandate, which is going exactly in the same direction.

And finally, on the mobility, there is regain interest on all mobility, of course, because it's clear that electric vehicles and especially heavy duty will not be enough, but also a lot of discussion about aviation fuel, especially in the current context. So again, very concrete discussion. Action plans, I believe, are being put in place Here, we have the team with government and stakeholders.

So I mean, it will take probably a few weeks and few months to unfold, but clearly a renewed interest in the current context.

Can I get the follow-up question or answer from Emilie about the insurance coverage for your facilities in Middle East and how that will be booked.

I would suggest that we take that offline because we have still quite a list of questions. So for fairness for all the interveners let's take that offline.

But the answer in short is yes, we are current.

We are now going to proceed with the next question. The question comes from the line of Tony Jones from Rothschild & Co.

Tony Jones from Rothschild. I have two. On helium, can you talk about the pricing ranges that you're realizing now as we go into Q2 for the non-contracted business. So I suppose that's like a spot market and how you expect that to translate to contracted pricing over the next few quarters?

And then separately, on the Middle East and highlighting North American strength. I'm very interested in customer feedback. Are you picking up any renewed interest in new capacity for industries like petrochemicals, potentially refining in North America given the low cost and supply integrity. It's been a long time since we've had a lot of new capacity added.

Thank you very much, Tony. So maybe on helium and I would like to give a little bit of context because I know there has been a lot of questions on this topic. So just to put again things in perspective, the helium sales are around 3% of energy total sales. It's, of course, a byproduct of the natural gas extraction. And as you know very well, there are different sources. U.S., Qatar and Russia were accounting for probably 85% of the total sources. .

There are many applications that's where, I mean, the question on the pricing is coming, being for maybe 20% medical application and the growing application, which is also around 20%, which is the electronics, but many other things in metal fab, in space, in fiber optics and so on.

Most of the contractual volume for us are in the electronics and the large industrial merchant customers. So with the LNG in Qatar stopping, we basically had minus 30% of the helium sourcing being unavailable. So that's why, I mean, being, I would say, responsible and given the inertia and the supply chain, we have anticipated the disruption in the supply chain and we were anticipating a globally short market.

By the way, and maybe some of you are not yet fully aware of that, the market is getting shorter with the announcement last week that there has been an export control from Russia. So overall, this is not the first time that this market is facing an unbalanced situation between the supply and the demand. But given the potential of magnitude, we have requested indeed a temporary relief from our supply contracts in order to allocate bonus based on application, criticality and of course, local regulation.

Let's keep in mind, that, again, these are temporary measures and the contracts are still in place. Which means that for all those customers, we are working with them to find the best solution to continue to supply their critical needs. For the rest of our customers, we are delivering as much as we can. We are not the only supplier by the way, in this situation in the past few weeks and days several of the global helium suppliers have also put in place allocation.

our pricing policy is to make sure that we pass through the additional cost of logistics, reliquefaction of the client from the cabin, for example, to make sure that we cover those additional costs.

Overall, I would say that we are working with all our customers to minimize the impact, and again, we are relying on the diverse sourcing. It's not only Qatar. We have other sources, and we have, of course, the Gronau which has been in operation for 10 years now.

And the last point I'd like to make on the situation because, again, there's a lot of questions. And people are following very closely what is happening globally. You should note that an immediate relief would be the restart of the LNG plant in Ras Laffan, much more than the opening of the Hormuz Strait. Because we are, in factor, and we have done that in the past, and we are still doing it, able to export ISO container from Ras Laffan by road. So that's why this is the critical element, much more than the reopening of the Hormuz Strait.

And finally, I would say that we are working well with our customer at this stage and manage overall the impact for the group.

Let's maybe ask Adam to comment on the U.S. and what you see and what your customers are telling us?

Yes. Absolutely, Francois. Thank you, Tony, for the question. So maybe one bit of context here. If you look at the opportunity slate that we have in the U.S. in particular, it's actually -- it remains very robust. So when it shifted, I would say, over the past 12 to 18 months, more towards traditional industries, for industrial gases, steel, petrochem, refining, but also very much towards electronics, as was previously mentioned by Francois and Jerome.

We absolutely see an increase in terms of conversations from customers in the refining space. A little bit less so on the pet chem side so far, but we still see some opportunities there as well. So it remains a very dynamic and positive area for investment for the group in the U.S. and I think leveraging our strong position on the Gulf Coast in particular.

So very active discussions going on across the spectrum in traditional industries, like we've seen also from the recent signing that we had with Hyundai Steel in Louisiana. So it's a pretty exciting time for development in this market.

Let's move to the next question, please.

We are not going to proceed with the next question. And the question comes from the line of Jean-Luc Romain from CIC CIB.

I have two questions. First relates to your EUR 5.5 billion backlog. Could you remind us more or less how much time we should expect between the backlog and the start-up of all of these projects and how much time to is project to be at more or less 100% of the design turnover? That's the first question.

Second question relates to recently announced discovery of native hydrogen in France. Do you think L'Air Liquide might have a role in case this is economic to develop in terms of logistics or whatever for these new resources?

Thank you very much, Jean-Luc. I will be short because I know that we have quite some questions have only time for one additional question. So first question on the backlog. Typically, those projects which are becoming larger projects, if it's quite diversified, are taking 3 to 4 years to be completed between the FID and the first start-up, and depending on the project, it could take 2 to 3 years to ramp up to the full capacity.

Regarding the question on native hydrogen, what is called sometime the white hydrogen. There's a lot of discussion about that. Of course, we are fueling the topic. Right now, it's quite far away in terms of opportunities and feasibility. If it happens that some hydrogen is available. Of course, given our position, and will organize, I mean, the logistic and the valuation of this natural resource but this is a little bit far down the road.

Maybe we have the last question?

So we are now going to proceed with one last question. And the question comes from the line of Sebastian Bray from Berenberg.

The large industries in Europe seem to still have a relatively soft volume development in Q1 of '26. My understanding is that the refineries in Europe were probably less badly affected by the Middle East and the Asian counterparts. What was the primary driver of this? Was it the chemicals industry? Was it refining? Or was it something else?

And quickly, if I might add one on CapEx. The backlog at L'Air Liquide is up by about EUR 1.5 billion in the space of 18 to 24 months. The consensus CapEx is barely changed. What do you think is a reasonable level of CapEx to anchor around for 2027. Could it be EUR 4.5 billion or higher?

All right. Emilie?

Yes. On the large industry in Europe. So we still see a relatively stable activity, like I explained before. And then in terms of the Middle East impact, like I said, on the refining probably less impacted or at least we see upward volumes. What we see also on the refining side of things,is renewed interest for low carbon hydrogen. RNG SAF are low carbon hydrogen. We see that in all the basins we operate in Europe. We are extremely well positioned to supply those customers with low carbon hydrogen and we are planning to leverage our key position to continue on this journey, of course.

And Sebastian, for the question on the CapEx. So we have probably CapEx for industrial investments, around EUR 4 billion for the year 2026. Keep in mind that on top of that, you have DIG for EUR 3.8 billion also. There is delay, I would say, between the backlog and the decision and the CapEx, as you know very well. That's just due about the investment curve. And with those projects being quite intense in engineering study, the CapEx tends to come a little bit later than on traditional standard projects.

All right. Thank you very much. I think this concludes our session. Thank you for your attention, of course, and for your many questions. Our results this quarter confirm the robustness and resilience of our business model. I think that you have seen that and, of course, the success of our proactive management and good discipline. Clearly, we start the course. And with the recall investment backlog, we are building significant momentum for the future.

I wish all of you a very good day. Thanks a lot.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a good rest of your day.

Good afternoon, ladies and gentlemen, and welcome to the Air Liquide Conference Call on 2025 Sustainability Performance. [Operator Instructions] I will now hand over to the Air Liquide team. Please begin your meeting, and I will be standing by.

Thank you, Sandra. Good afternoon, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you for attending the call today. On our website, on top of the CSRD disclosure, you will find our 2025 integrated annual report, a press release detailing our extra financial performance and the presentation we are sharing today.

Joining me today are Diana Schillag, member of the Executive Committee, notably in charge of sustainability, along with Louis-Francois Richard and Guillaume De Smedt, respectively. Louis-Francois and Guillaume will join Diana for the Q&A session. Let me now hand you over to Diana.

Thank you very much, Aude, and welcome to everyone. It's clearly a great pleasure to be with you to present our 2025 sustainability performance and as well draw perspective on what is coming next. 2025 is an important milestone for Air Liquide. It marks the successful conclusion of the advanced strategic plan, which, as you know, was the first to combine financial and nonfinancial performance. Before we dive into the specific indicators and projects, let me share some elements of context with you.

The advanced cycle started in a time when sustainability matters benefited from a wide consensus across markets and as well geographies. And this is a time when a lot of net zero commitments were taken. Now 5 years later and following a number of geopolitical events, the landscape has considerably evolved with very diverse and fragmented dynamics in markets, geographies and as well regulations. And of course, with rising importance given to energy security and sovereignty.

Now despite these complexities, we have delivered on our commitments, strengthening the group's resilience while delivering measurable positive impacts for the planet. And I would like to very warmly thank all the Air Liquide teams for this success.

Please turn to Slide 2. Now let's take a look at our agenda for today. We will begin with the sustainability performance results, especially as many of our advanced commitments reached that term in 2025. We will then focus on our climate transition plan and share with you where we stand regarding our decarbonization levers. And to make it concrete, we will talk you through several flagship projects that will illustrate how we are turning ambition into reality. And finally, of course, we will open the floor for a Q&A session.

Please turn to Slide 3. Now let's start with our environmental performance and more specifically with CO2. Compared to 2020, the group reduced its absolute CO2 emissions by 13%, reaching by that our first objective of inflection point actually 1 year ahead of schedule. That's what we told you already last year because it was already -- the inflection point was already achieved last year. So this represents a reduction over the total time until 2025 included of 5.1 million tons of CO2 over the period, much ahead of what a linear decrease would require to reach the 2035 objective of minus 33%.

Furthermore, we decreased our carbon intensity compared to 2015 by almost half, more precisely, 46%. And this is significantly surpassing our 2025 target of minus 30%. What about water? Well, we met our objective. Water management plans were implemented at all of our 75 priority sites in high water stressed areas, another element enhancing our operational resilience.

Let's turn to Slide 4. Moving now to Health. We continue to see solid progress and concrete impacts. 64% of our 2.3 million patients at home now benefit from personalized care plans. And as populations age and chronic diseases rise, we are responding to the growing patients' preference for being serviced at home, providing the right level of care at optimal cost. At the same time, in low- and middle-income countries, access to oxygen still remains a challenge in many areas.

Since its launch in 2017, our Access Oxygen program has expanded with a population of about 3.5 million people living in regions now covered by this initiative. And let me highlight that we are the only industrial gas company supporting the World Health Organization's ambition in this field.

Please turn to Slide 5. Now I would like to share our social achievements. Beyond our environmental contributions, we are dedicated to social progress for our employees and striving to bring positive contributions to the communities we serve. Let's start by our absolute priority, which is safety. In 2025, we achieved a record low accident frequency rate of 0.4 for our employees. This represents a remarkable 60% reduction in just 2 years. What it means is that about 100 people went home safe, thanks to preventing lost time accidents.

Moving on to diversity. We now have 34% women in management and professional roles. It marks a plus 4% increase since 2020 and positioning us as a leader in our industry. Why is this specific number so important? Because research consistently shows that the tangible benefits of diversity being innovation, adaptation and of course, performance really begin to materialize once the minority reaches 1/3 of the total population.

Finally, we are also proud of how we support our people and our communities. Our common basis of care program intends to guarantee the same level of social coverage for our 65,000 employees worldwide. It was fully deployed at the end of 2024, 1 year ahead of schedule. On top of that, we have also fully deployed a minimum living wage across the entire group. This ensures that every employee everywhere in the world receives an adequate salary that allows them to live with dignity with his or her family.

Last, we continue the positive impacts we bring to society through our Citizen at Work corporate citizenship program. It's now deployed in all countries and affiliates. In 2025, we had more than 7,000 active employees volunteering their time and expertise to support local community projects.

Please turn to Slide 6. Let me now go through our climate transition plan and its levers. Please go to Slide 7. As you certainly recall, our decarbonization road map is built on 3 strategic levers that combine environmental performance with operational resilience. First, low-carbon energy sourcing. By securing massive amounts of renewable and low-carbon electricity, we are effectively protecting against energy price volatility and strengthening energy security.

Second is asset management. By improving energy efficiency, reconfiguring assets and electrifying, we are structurally increasing the group's operational performance and resilience. Last, carbon capture and storage, what you know as CCS, which is a way to decarbonize our assets, but also the only large-scale solution to decarbonize hard-to-abate industries in the near term. While this market is still maturing and relies on evolving regulations, our technology is ready and the first projects are materializing.

Please go to Slide 8. Now how did this translate into numbers? This waterfall chart illustrates how we achieved our 13% absolute emission reduction since 2020, driven by 2 major levers. Low-carbon energy sourcing has been clearly the most significant driver, accounting for 53% of the decrease. We accelerated our shift to low-carbon power, bringing the share of low-carbon power to our global mix to 40% in 2025. This alone contributed to a reduction of 2.7 million tons of CO2. The second lever is asset management, contributing 35% of the decrease.

We continue to drive operational efficiency across our production sites to reduce energy consumption and fossil fuel reliance. This includes the strategic electrification of steam-driven air separation units, for instance, in China, alongside several asset optimization and reconfiguration projects. Collectively, these actions have structurally lowered our footprint by 1.8 million tons of CO2 over the period. Finally, while CCS is not yet reflected in the 2020 to 2025 reduction numbers, the technology is mature and ready with our first project to capture CO2 from our largest hydrogen plant in Europe being built as we speak.

Please turn to Slide 9. I would like to share with you one illustration for each of our levers. And here, a flagship example of our first lever is clearly South Africa. Air Liquide is running the world's largest oxygen production site in Secunda, South Africa with 47,000 tonnes per day, and that had the opportunity that actually I had the opportunity to visit last year. Air Liquide and Sasol joined forces and have signed 1 gigawatt of PPAs of renewable power for the site in combination of new solar, wind and battery facilities. For Air Liquide alone, this is 460 megawatts that will bring 1.4 million tons of CO2 emission reductions every year. So this project is a major contributor to the group's decarbonization.

Let's turn to Slide 10. For the next illustration, let me take you to China. In Tianjin, where we have carried out a major modernization of 2 large-scale air separation units in the country's fourth largest city. This is part of a contract renewal to supply 4,000 tons of oxygen every day to a chemical customer. In many Chinese industrial basins, steam is generated by burning coal.

By replacing steam with electricity and sourcing low carbon and renewable electricity, we are avoiding 800,000 tons of CO2 emissions every year. This project perfectly illustrates Air Liquide's business model, whereby investment is backed by long-term commitment by the customer. Energy transition projects target the same standard rate of return than any other project. On top of having reduced the group's CO2 emission, this project also cuts the site water usage by 50%. Given the site of the site -- the size of this site, this represents minus 8% of the group's total withdrawals.

And with its green leap forward, China is certainly the place where energy transition is happening at an accelerated pace, and Air Liquide is proud to be actively contributing to this trend. Please turn to Slide 11. Let's now look at the concrete application of our third lever, CCS. The Porthos project in the Port of Rotterdam is evidence that when the right ecosystem exists, CCS projects move from concept to reality. Starting in the next few quarters, the Porthos Consortium will store 2.5 million tons of CO2 annually from the different partners.

For Air Liquide, this will allow us to reduce the Scope 1 emissions of our largest hydrogen plant in Europe by 400,000 tons per year. Porthos succeeded, thanks to 3 factors: industrial synergies with the shared infrastructure, proven technology, our proprietary Cryocap solution and policy support with a clear regulatory framework in the Netherlands and carbon contract for difference. We are convinced that the first CCS projects in Europe will open doors for wider adoption as CCS is the only available option to decarbonize hard-to-abate industries in the near term.

Let's turn to Slide 12. And now I would like -- I suggest that I conclude with a few last messages. So please, Slide 13. Well, in conclusion, despite a complex international context, we have delivered a strong sustainability performance during the advanced period. Our achievements also contributed to enhancing the group's resilience. At Air Liquide, sustainability is not just a responsibility. It's a fundamental strategic choice and a driver of performance. As we enter 2026, we stay the course on energy efficiencies, low-carbon sourcing and climate adaptation with a pragmatic and focused approach, always translating our ambitions into concrete impacts for our customers, the planet and society.

Looking forward, we are convinced that advocacy for low-carbon products must continue, especially for hard-to-abate sectors. The carbon measures initiative that we joined at the end of last year is a typical example of a platform aiming at promoting low-carbon product markets. I'll stop here, and we are now happy to take your questions. Thank you very much.

[Operator Instructions] We will now take the first question, which is coming from the line of John Buckland from W1M Investment Management Limited.

Can you hear me right?

Yes, very well.

I'm just asking because I'm using the computer to call you rather than a phone. This is the modern way. Anyway, thank you for your presentation and the progress you're making. But I do have some more detailed questions about future progress because when you look at the details of emissions and energy use, the impact of your renewable purchasing is not really seen very strongly. For example, Scope 1, Scope 2 emissions, both market and location base are pretty much the same, which means you're not doing much better than the grid, local grid. And then when you look at the total renewables energy used, it's still around 14% of the total. So it's -- renewables went up 6.4% versus total energy consumption of 3.2%. So -- and it shows on the table that you provided today still around 14%. So it's not really clear that you're making a huge amount of progress on purchasing renewable energy. I wonder if you can talk about that, please.

Yes, of course. And so I will give maybe just a short reminder on our Scope 2 with actually low-carbon power and then hand over to Guillaume, who can go into the details of renewable electricity and PPA purchase that we have done. So just as a reminder, we have actually accelerated the shift to low-carbon power, especially through the pluri-annual power purchase agreements.

In 2025, the share of low-carbon power purchased by the group reaches 40%, so 40, but that's for low carbon power. And globally, the low-carbon electricity sourcing has already prevented the emissions of 2.7 million tonnes of CO2 per year compared to 2020. And that is actually already delivering quite a measurable impact, especially in the carbon-intensive geographies that we operate in. Maybe, Guillaume, do you want to add a word on the Scope 2 for renewables?

But that -- can I just interrupt? You said 40%. What you're saying is that of the low carbon energy that you're purchasing, 40% is PPA. Is that right?

No. What I'm saying is that the share of low carbon power purchased by the group out of the total power purchased is 40%. So low carbon represents 40, 40% out of the total power purchased.

Why is that not shown in the table of -- in your environmental table that provided the Excel farm I've downloaded. It's said here that total renewable energy consumption is 9.5 million megawatt hours and the total is 67 million, and that's only 14% of the total. So 14% versus 40% doesn't make sense to me. And perhaps I'm being stupid, but perhaps you could explain.

No, I think what we need to clarify is that I'm talking about low-carbon electricity. And I think you mentioned the renewable energy, so purely renewables. And of course, low-carbon includes as well nuclear energy, for instance. So the renewable piece within low carbon is certainly the number that you have in the table.

Yes. Maybe I can elaborate a bit first on the numbers because, in fact, the table you have is a mandatory table we have to publish as per the CSRD reporting through the climate and energy standard, ESRS E1, where basically the 14% is the share of renewable energy out of the total energy procured by the group, knowing that the total energy procured by the group is both the electricity, the power we use to run our air separation unit, but also the natural gas we purchase for operations, which dilutes a lot in the numbers in the figures you have on the 14% the share of renewable power. If you look at power only, and I think maybe it's in the text, but it's not in the table, you have the 9.5 terawatt hour of renewable power. When you add the nuclear power, you go through to 15.6 terawatt hour, which represents 40% of our power purchase.

Excluding natural gas?

Excluding natural gas for the share, which is used as a fuel for our hydrogen production units.

Maybe to help your communication, it would be useful to expand this table to make it clearer.

Thanks for the suggestion.

And on the location base versus market-based point, it happens and that's part of our decarbonization and that's a key lever in our decarbonization that we still have a handful of air separation units, which are driven by steam, knowing that the emission factor of steam is much higher than the emission factor of the grid. So that's why when we electrify a steam-driven ICU like the project that was presented, we save and we reduce a lot our emissions. One electrification, it's several hundreds of thousands of tons of CO2 per year, which is reduced.

So how many air separation units globally still use steam? And when -- what is the program to getting that to 0?

We have, let's say, we don't disclose the precise number of assets, but we have a dozen of such assets out of a fleet of 400 -- more or less 400 air separation units worldwide. So it's really a very, very small amount and the program is to work with our customers in order to shift them to electrical power when the access to power in the location permits.

And that is why actually the electrification is one of the levers that we have highlighted as well in our presentation and as well in the example that we have chosen. So that's exactly what you have seen in the Chinese example that I just mentioned in Tianjin.

[Operator Instructions] We will now take the next question from Keith Lee from Lombard Odier Investment Managers.

I had 2 questions. One is on the topic of Scope 3. So I know I obviously see that you have disclosed your Scope 3 emissions, and there is some detail on the strategy to reduce them. I was wondering what are the considerations around setting a Scope 3 target, please? And whether there's a plans to do so? Or if not, why not? And then secondly, with regards to water management, and obviously, congratulations on achieving your target for 2025. I'm wondering what do you -- what are the plans for setting new targets? What kind of KPIs will you be disclosing on water risk moving forward, please?

Okay. Thank you very much. So yes, on Scope 3, you have certainly seen that we are actually year after year reinforcing the Scope 3 categories and becoming more and more clear on the elements that we share on Scope 3, working as well on the methodology for estimations. Scope 3, it's always a hard work on methodology to really solidify our estimations on Scope 3 because it is, of course, as you all know, linked to the emissions of, on the one hand side, our suppliers and on the other side, downstream, our customers.

So it always takes a bit of effort to actually identify that. For the moment, we are still in that phase of clarification what we include in our Scope 3 emissions. And that is where we are -- what we are focusing on our energy on for the moment. So we have not planned short term to fix Scope 3 objective. Now when it comes to water, water is clearly a very -- a second big topic for us. We have achieved to establish 100% of our -- to equip 100% of our 75 priority sites with water management plans. And this is clearly a big achievement. It was a big step forward.

Now of course, given the importance for the group, we will not stop here. Now we are not in the face of revealing a new strategic plan. So as we -- this is actually work in progress. But I can -- without revealing a secret, I can already tell you that water will clearly be one element where we will continue to move forward. Maybe one first element that I could already share is that in -- when we started our effort on water, the Aqueduct referential, we used the Aqueduct referential at that time. That's how we came to the 75 priority sites.

Now when you look at our disclosure in the URD, we have actually disclosed the total amount of water withdrawals for all the sites under the new Aqueduct guideline. So the number of our sites has actually risen to 112. And going forward, this is, of course, the number that we are tackling. So as a minimum, we will certainly target to equip all of those 112 sites with water management plan. But again, more to come on water.

Great. And sorry, if I may, just a quick follow-up on the Scope 3 because obviously, in the absence of emissions target itself, on our side, we certainly welcome proxy targets if they're credible. And there, we note that you have this objective to have 75% of your top 50 customers set a 2050 net zero goal by 2025 and 100% by 2035. I'm just wondering how you I guess, how do you consider the extent to which you've actually influenced your customer to do so, just bearing in mind a context where increasingly large numbers of companies are setting net zero by 2050 goals. And if you ever consider also pushing them to set interim goals, which, as you know, are actually really important, right, because we do need emissions to come down soon and the shape of the curve in terms of emissions reduction really does matter in terms of overall emissions reductions. So interim goals are just as important as a long-term 2050 goal.

Yes, I couldn't agree more. And I totally agree as well with you on the pace at which decarbonization is moving forward, which, from our perspective, is as well much too slow compared to the need that we see. So fully aligned with what you're saying. Now how -- what are we looking at? We are, of course, following our top 50 customers in a regular basis and as well tracking their net zero objectives. We are looking as well into shifts between -- there was one shift moving -- some of them moved to 2030 targets because it's especially for the European ones because it's as well in the CSRD one of the KPIs that was requested.

But we see as well some of them actually moving back or moving out and from the midterm, short-term targets and rather pushing it out to 2035. So overall, our mix of customers is evolving. We still see a good engagement in terms of net zero. And maybe I'll let Louis-Francois or Guillaume add a word on the customers.

Yes, I can do, Louis-Francois speaking. I think in terms of influence, what we can do is more to influence on the medium term. You know what I call medium term, [ 2030, '35 ] because this will be the term of contract renewals. So things we are discussing today or in the years to come. So yes, we can have an influence on our customers discussing techno solutions, decarbonization solutions for their long-term commitments, I think it's very difficult for us to influence because this is very much driven by their markets, their customers. And so let's be humble. I think our ability to influence is limited. So I would make the difference between the short to medium term and the long term.

We will now take the next question from the line of Siti Griffiths from Federated Hermes.

Just 2 questions and one of which is probably very basic. But just wanted to understand the difference between the baseline years that are used for the carbon intensity versus the carbon emissions reduction in terms of absolute terms, that 2015 versus the 2020 baseline. I wanted to understand that approach where you've used different years for that. And then the second question relates to the -- on Slide 7, where it talks about carbon capture and storage in terms of having only large sizes available for hard-to-abate sectors. Do you have any plans in terms of having small and medium-sized sort of solutions that still align with carbon capture and storage?

Okay. So for the objective fixing, maybe, Guillaume, you know the history. So 2015 was actually the year that was set as a basis when -- because we actually fixed that carbon intensity target before the advanced strategic plan. And that was enhanced and taken on continued along advance. Guillaume, maybe you want to say a word about the carbon intensity indicator.

Yes. Indeed, to make a bit of history, in November 2018, we were the first in our industry to announce the global climate objectives. At that time, we took the objective to reduce our carbon intensity, so CO2, Scope 1 plus 2 on EBITDA by 30% in 2025 versus 2015. So we took a previous year. Then in 2020, we developed a new set of objectives that were announced in March 2021, shifting to a global absolute emission reduction objective on Scope 1 and 2, so the minus 33% 2035 versus 2020 baseline.

And in 2020, we decided to use -- in 2021, when we announced our objective, we used the 2020 baseline because it was the last year of reporting where we had reliable data. And that's a good practice in target setting for climate to use recent years. So we would not take an objective in 2021 on a 2015 baseline. So that's the reason why we have these 2 track. And basically, the intensity objective was instrumental in the group to onboard our operations and to understand how to manage global climate objective as a group that allowed us to take much more ambitious objective in March 2021.

And for the CCS, Guillaume, do you want to continue? Explaining the CCS projects, just perspective on those?

On CCS, if I get correctly the question is that today, indeed, we target large-scale project. And in particular, we target large-scale project in hubs in order, in fact, to build volume to be able to develop the infrastructure, which is the first step. Once we will have developed the first hub and the first infrastructure to export the CO2, then you can target smaller project. We have basically the technologies to do so, but it's more a matter of economics that to deploy the first of its kind project for CCS, it's easier economically speaking, to target large-scale projects because you have more volume, so you can amortize basically the capital on more volumes.

We will now take the next question from the line of Mary Gauthier from Comcast.

I had 2 questions. The first question is maybe if you could share a little bit more on your participation in carbon measures. Maybe what you find is missing today in current accounting protocols such as the GHG protocol on Scope 3 that led you to join this initiative and hence, what you expect out of it? What is your hope out of joining this initiative?

And then the second question is more relating to Scope 1 and 2. On your 3 levers are very clear in the presentation. I was just wondering if you believe that the efforts to decarbonize are actually going to be harder in the future for lever 1 and 2, so on energy sourcing and asset management. And if you're expecting hence, lever 3 to compensate for lever 1 and 2, if the low-hanging fruits have basically already been reaped on lever 2 on ASU electrification.

Okay. Thank you very much. So I suggest I take the first one on carbon measures, and then I'll let Louis-Francois or Guillaume complete on the levers evolution. So maybe on carbon measures, I think we have already mentioned during the first question that was raised the context and actually we feel that the world is moving only at about half the speed it needs to meet the 1.5 degrees target. So for us, it's clearly not enough and it is not fast enough.

What has changed as well significantly is the approach to energy transition. The strong consensus we were seeing 4 to 5 years ago has clearly fragmented. So in summary, things are still moving, but not at the same pace and with the same enthusiasm around the world. So to address the global warming challenge, we believe that manufacturing industries must decarbonize. That is a reality, and it will not go away. And as private sector players, we believe that we need strong, clear and consistent market signals to invest. And that's exactly what's behind carbon measures.

Just as a reminder, carbon measures dual objective is, first, to advocate for product level carbon intensity standards as those critical climate policies as they are absolutely critical for climate policies to drive decarbonization. And second, to develop the carbon intensity letter-based accounting standard that is needed to underpin such standards and as such, ensuring actually the right accuracy of data. Now why are we a founding member?

Well, it's because despite the climate frameworks and protocols that have been enacted across the globe, global emissions still keep growing. And that's where carbon measures is calling for a major shift in the type of climate policies to drive real actions, especially in terms of demand for energy and energy-intensive materials, it will continue to increase in the coming decades.

So let's face the fact, demand for low-carbon product remains limited to small voluntary markets today because they often cost more to produce without offering a competitive market advantage. And that's where CA aims to fix it by creating market signals by which low-carbon products are legally differentiated and rewarded. And this is actually what we believe is essential to decarbonize especially the hard-to-abate sectors. So in a nutshell, we want to advocate for mandatory product carbon intensity standards with pragmatic technology-neutral regulations that allow to reduce emissions by establishing clear conditions for market access.

So products to be differentiated based on their carbon intensity with manufacturers of products that have a carbon intensity above the mandated threshold having to buy credits from overperformance. This transfer then of value to low carbon intensity products will drive investments in low-carbon processes. And as such, decarbonization becomes a competitive advantage rather than a cost burden. And it would, we believe, unlock the demand necessary to scale technologies like CCS and low-carbon hydrogen.

So we are today 25 members in carbon measures. We are -- as you probably know, we had the launch in November last year during the Sustainability Business Corp. And we are now building up the expert panel to work, especially on the ledger for carbon accounting as well as the product mandates. And here, we -- our intent is to focus on the 70% of products that actually have -- represent the highest emissions. So much for carbon measures. So now handing over to the levers.

Okay. So on the outlook for the transition plan continuation, first of all, I would like to recall that we have EUR 2 million of backlog of energy transition projects, so still to start up and that will bring emission decrease. We expect the low carbon electricity sourcing to remain strong, in particular, because we signed since 2021, a large amount of PPAs, 5.6 terawatt hour, and they have not all started and they are not all at full ramp-up, specifically in China and South Africa. So this will feed, I would say, the first lever of the transition plan.

Second, asset management. So we have either electrolyzers to start up, either electrification project. We have one additional one in China. So that will feed the asset management lever, which is more a modernization, reconfiguration of our assets. And the last on CCS, so we have the Porthos project in the Rotterdam [indiscernible] that is due to start, let's say, in the year to come. So that will also feed the CCS lever. So I believe that in the next few years, we'll certainly have a more balanced contribution of the 3 levers. But of course, looking forward and beyond 2030, we will need to have more projects so that we can continue the decarbonization. But this is more or less -- these are more or less the perspectives for the next few years.

[Operator Instructions] We will now take the next question from the line of John Buckland from W1M Wealth and Investment Management.

Just some follow-up. On Scope 3, purchased goods and services, capital goods is important of sold products in the numbers. So I wondered if you could talk about suppliers as well as you've been talking about customers and the relationship there and what you're encouraging to do. But also, I just wondered when you make your assumptions about use of sole product, what assumptions are you making about the decarbonization of your customers' energy consumption? I mean -- or are you just saying we're assuming that where we are now continues in future? Because obviously, that makes a big difference if you're talking about long use products.

Yes. So actually, on the supplier side, we have very early on engaged with very concrete actions to drive down Scope 3 emissions coming from suppliers. That is a program where we had as well internally objectives fixed, and we are driving that forward. So you're totally right. Of course, we do not only focus on customers, but remain very active as well on suppliers. Now again, coming to your question regarding the customers, Guillaume, do you want to add some elements or Francois?

Or we can make a mix of answers. On the use of sold products. So at the moment, we are disclosing numbers for the CO2 that we sell as a product. We are disclosing numbers on the nitrous oxide that we are selling in particular to hospitals. And we are working also on fluorinated gases, but we are not yet disclosing numbers. You have qualitative disclosures in the URD. So for these -- any of these products, the Scope 3 that we disclosed is a combination of the global warming potential of each molecule multiplied, of course, by volumes, but using also an abatement rate because depending on the application, take the example of an electronic fab, you have scrubbing systems that are collecting the exhaust from the process. And so the molecules are being eliminated. So there is a strict and audited calculation that is, let's say, compiling all this data.

Also worth mentioning, there is an important move within hospitals to move away from nitrous oxide for anesthesia. You have this big time in Europe, but also in the U.S. So our teams are working also on reducing volumes for this type of applications because you can find alternatives for the hospitals. And I think this is where we are in terms of use of products sold in the Scope 3. Maybe what is worth having in mind is that we have internal action plans to reduce some of these categories. So we are not necessarily disclosing objectives, but we have internal plans to work on these emissions.

What percentage of your revenue is covered by the -- by your disclosure and use of sold products.

The products that I mentioned are very marginal. The large -- I would say, the bulk of Air Liquide sales are hydrogen, air gases, oxygen, nitrogen. So there we are referring to CO2, nitrous oxide, fluorinated gases. This is very limited sales for the group.

Okay. And that's going to remain the case. There's no areas where you would make future disclosure is going to be a much bigger number.

Yes, absolutely.

May I ask another quick question on -- you talked about water and you explained that you've had a major reduction in China. Could you just explain exactly what -- how you've achieved it and how that may be can be used in other places?

Yes, that's the cooling water for the steam condensates. Any Air Liquide plant, we are compressing a large amount of air in particular. So this is creating heat and you need to cool down your machines in particular and the process air. And so this is why we need cooling water. So in the case of the Chinese plant, this was the water to cool down the steam condensates. And so any time we'll find this configuration, we'll have a very significant water withdrawal reduction. But we don't have this in any of the steam-driven plant. So that will depend on the asset-by-asset case.

So sorry, just to understand. So you said you've got 12 plants which use steam?

Yes.

But is that -- but you're also talking about cooling the condensate. So is that saving related to your steam ASUs? Or is it all -- is it independent of that?

Can you ask the question again? Maybe I'm not too sure.

Well, I'm just -- you're talking about using water to clean -- sorry, using water as a coolant. You're also talking about steam condensate.

Yes.

So the question I was sort of relating -- I was trying -- maybe this is wrong, but you have steam ASUs, right, which you talked about earlier. Is there a relationship between the 2, the water and the getting rid of the steam ASUs. But presumably if it's not, then every single ASU has a cooling requirement.

It's not the same water. You are right. Any air separation unit has cooling requirements. So we have cooling water in various process and form to cool down these units. In the case of steam driven, you have an additional steam, but steam is being recuperated through the condensate. So this is not creating any water loss, and it's not the same water.

Maybe if I may add, in fact, on steam-driven ICUs, in some cases, and it depends, in fact, on the technical settings, you have to cool also the condensate themselves to be able to recycle them back in the water system. So that's why on some specific steam-driven ICUs, you have higher water usage.

So you had a big -- so I'm just -- sorry, just being late at this point now. You said you had a big reduction in China. Can what you did in China be applied to other areas or I'm just being a bit slow. I didn't understand how that could be an initiative throughout rest of the world.

In other steam-driven ICUs, in fact, it will depend on the type of cooling circuit that is installed on these plants. The savings when we electrify a steam-driven ICU in terms of water depends, in fact, on the type of cooling circuit that is already installed as of today. And there are several types that have been designed at the buildout of the plant.

And the massive reduction does not apply to electrical drive air separation unit.

We will now take the next question from the line of Lionel Heurtin from Ofi Invest Asset Management.

I read in the Excel spreadsheet that 48% of your Scope 1 is covered by regulated emission trading scheme. I assume this is across geographies, not only the EU. How many million tonnes did you receive free of charge? Is the trend down? And how many million tons do you need to buy as the trend for the ton you need to buy be up? And what is the total cost of purchase? And what is the average cost per ton of CO2 emission cost you?

You are right that many of our assets that have Scope 1 direct emissions are covered by ETS, about half our emissions. We do not disclose the total cost or the average cost or the amount of allowance that we buy. But what I would like to remind is that as per our business model, this is passed through to our customers, in fact, the CO2 cost.

Because this is a good way for us to put a price on what is the cost of CO2 emission for Air Liquide, even if you pass it to your customer, we can still think it's a risk.

Actually the CO2 cost, Guillaume was referring to is passed through to our customers. So we have no direct risk exposure. We could say we have an indirect the competitiveness of the customer. But within our P&L, we are not bearing CO2 cost or risk because in the form of our contracts, environmental attributes at large are passed through to the customers. Then it's up to the customer -- to our customer to either structure it into its product price, and that's what they do usually.

We will now take the next question from the line of Tsitsi Griffiths from Federated Hermes.

I'm conscious that we've spoken a lot about carbon emissions and climate. Just wanted to touch on health and safety, just looking at the lost time accident frequency rate and how that's come down as well as other metrics looking at fatalities and other metrics as well. Just wanted to understand because there still seems to be a gap that persists between Air Liquide's own employees and subcontractors. So 0.4 for the company's own employees, but you're looking at 0.7 for subcontractors. So I just wanted to understand why that gap still persists in terms of that accident rate and if there might be a difference in how health and safety is perceived by subcontractors that work for Air Liquide?

Yes, you're totally right. So first of all, safety is our first and foremost priority, and it is clearly very strongly driven forward for our employees, but as well for our -- for temporary employees and subcontractors. So the engagement that we have is really about all individuals and the actions that we take, may it be on the culture, may it be in terms of system and procedures. And of course, ultimately, in terms of mindset, we include the subcontractors into that.

It is for us as well a license to operate. And this is where in our procurement initiatives, safety is part of the selection criteria for subcontractors. Nevertheless, it's very often separate companies who are actually employing our subcontractors. And of course, they might have a very different view on that. That's what we try to limit or we try to limit the negative impacts of accidents on our subcontractors by selecting the right subcontractors who are compliant with our expectations.

And then, of course, to make sure that wherever they operate, if they operate on our site, that they are well trained on our processes and on our procedures on how we would like to operate. We have as well introduced what we call the stop work authority, which is basically giving every employee, every operator, internal or external, the right to stop work if they perceive a major risk. And this is clearly something that we are pushing forward to all our operators on site, may it be our own employees and our subcontractors.

But you're fully right on subcontractors, we still have room for improvement. And of course, let's be very clear, our ambition is still 0 accidents. So even for our employees, despite the fact that we have made tremendous progress, we are not yet there where we would like to be.

I would now like to turn the conference back to the Air Liquide team for closing remarks.

So I would like to thank all of you for your participation and the active questions. It has been a pleasure sharing those elements with you. Thank you very much for your attention, and I suggest we close now the session for this year. Thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Air Liquide Full Year 2025 Revenue Conference Call.

[Operator Instructions]

I will now hand over to the Air Liquide team. Please begin your meeting, and I will be standing by.

Thank you, and good morning, everyone. This is Aude Rodriguez, the Head of Investor Relations. Thank you very much for attending the call today. Francois Jackow and Jerome Pelletan will present the performance of the full year 2025. For the Q&A session, they will be joined by Emilie Mouren-Renouard and Adam Peters, both Group VP overseeing, respectively, EMEA and North America. Adam is on the phone with us from the U.S. In the agenda, our next announcement is on April 28 for our first quarter revenue.

Let me now hand you over to Francois.

Thank you, Aude, and good morning to all of you. It is a real pleasure to be with you today for this earnings call. This past year, Air Liquide has reached new heights in both operational excellence and financial performance. The inherent strength of our operating model, coupled with the transformation momentum driven by our teams, has delivered robust performance across all key metrics. This is particularly significant, given the ongoing macroeconomic and geopolitical headwinds.

Let's look at the specifics. Sales grew plus 2% on a comparable basis. This proves our ability to capture growth even in a complex environment. Our focus on operating discipline is delivering clear results. It reflects more and more the visible contribution of the transformation momentum throughout the organization. We achieved a record Gas & Services OI margin improvement of 130 basis points, excluding energy pass-through. At the group level, the 100 basis point improvement keeps us firmly on track to meet our 2026 commitment of plus 460 basis points in 5 years. This operational leverage translated directly to the bottom line with recurring net profit growing by plus 10%, excluding currency impact. Our recurring ROCE continues to rise above 11%. Sustaining this momentum while simultaneously scaling up our investments is a testament to our disciplined capital allocation and, of course, improve performance.

Our ability to generate cash has again improved. Cash flow is growing at plus 8%, excluding currency impact, providing us with significant strategic flexibility. Our performance is equally strong on extra financial fronts. We achieved record safety levels. We also further decoupled growth from carbon with CO2 emissions now 13% below our 2020 baseline, and the carbon intensity had been reduced by 46% in 10 years.

Finally, our investment backlog remained at a record high of nearly EUR 5 billion in spite of the exit of the ExxonMobil Baytown project. This is more than 15% above last year. These are committed, signed projects already under construction effectively locking in our future growth. Our investment portfolio of 12 months opportunities is also at a record high level of EUR 4.6 billion. As these results demonstrate, Air Liquide is steadfast not only in delivering profitable growth regardless of the macroeconomic conditions, but also preparing for the next phase of growth. This is a structural strength of the group.

2025 marks the end of the 4-year strategic ADVANCE plan. You see on Slide 4 that we have successfully delivered on all 3 objectives of our ADVANCE strategic plan: Growth, first, with over 6% average annual sales growth on a comparable basis versus 2021, we have exceeded our midterm ambitions. Returns, our recurring ROCE has remained consistently above 10% since 2022, hitting this target a full year ahead of schedule.

Decarbonization. Finally, with 3 consecutive years of absolute CO2 emissions reduction, our emissions are now 13% below 2020 level. We have officially reached the inflection point we projected for 2025.

In summary, the ADVANCE plan has met its objective across all horizons. In the current supply environment, this track record demonstrates our ability to deliver consistent results. It is the foundation upon which we build our next chapter with confidence.

On Slide 5, you see one of the reasons to be confident. The acceleration in margin improvement you see here is a direct result of our evolving culture of operational excellence. Looking at the graph, the progression is clear. We shifted gears during 2017, 2021 period, stepping up our performance to plus 240 basis points versus 50 basis points in the previous 5 years.

Under the ADVANCE plan, we have accelerated once again. With a national 100 basis points delivered in 2025, we are now fully on track to reach our record-high target of plus 460 basis points by the end of 2026. This momentum proves our ability to structurally enhance our profitability year after year. And there is more to come. And the reason why there is more to come is that our margin expansion is underpinned by the structural transformation program we launched in mid-2024. In 2025, we shift from design to full-scale execution, leveraging data and AI to drive structural efficiency.

Here are some examples across each of our 4 pillars. First, streamlining the organization. We have simplified our structure, reducing by up to 3 management layers. In the past 18 months, we have reduced our global headcount by 5%. This is without taking into account the new restructuring projects announced in 17 European countries this past December. This will secure midterm synergies as they are fully implemented.

Second, industrial excellence. Our new performance management system is now 100% deployed, creating a unified global standard for operation benchmarking. It is designed to continuously boost our performance across more than 400 industrial sites and covering the full value chain. Another example is our end-to-end optimization for liquid gases, which is already rolled out at 45%, significantly reducing our industrial and supply chain costs.

Third, Global Business Services, GBS. We have eliminated subcritical smaller GBS and expanded our reach with a fourth state-of-the-art GBS center located in India. GBS headcount has grown by plus 35% as we migrate tax from local operations to specialized hubs. We have now secured 25% of our targeted savings from this initiative. As you see, there is more to come.

Finally, commercial initiatives to transform customer care to AI-driven automation. Five major projects are now in the rollout phase, including the AI powered streamline processing of over 17,000 daily customer e-mails and orders in Europe and in the U.S. This transformation program is still in its early stages but the momentum is clear. Leveraging our customer-centric and employee engagement culture, we are building a leaner more disciplined, more standardized, more data-driven and more agile Air Liquide.

On Slide 7, as a matter of fact, I want to highlight the strength of our human and social commitments, which are foundations of our long-term success. Safety excellence. We achieved the lowest lost time accident frequency rate in our history. It represents a 60% reduction over just 2 years. Why? I am personally proud of this progress by our teams. Safety remains an absolute priority. And our ambition remains unchanged, 0 accident.

Social impact. Under the ADVANCE plan, we have reached several milestones in our social commitment. We have significantly increased the representation of women in management, leading the industry by example. I am also pleased to announce the full deployment of our common social care coverage across every country where we operate.

Finally, community engagement. We have successfully scaled our global program to support local communities, ensuring our growth, create a positive impact wherever we are present. These achievements are the tangible evidence of Air Liquide's commitment to combining financial performance with a positive impact.

All-weather growth is a unique strength of Air Liquide. Moving to Slide 8. We have clear evidence of our 4 growth engines in action delivering both immediate and long-term value. First, asset optimization. We continue to unlock low CapEx growth by leveraging our existing pipeline networks and infrastructure. This allows us to secure new sales with minimal investment.

Then core business leadership. Our technological edge remains a major differentiator. As such, in 2025, we secured several long-term contracts in electronics across Asia and the U.S., alongside a landmark project in Europe. Then, energy and industry transition. The industry transformation, which implies carbon reduction, but also electrification and automation is ongoing. It is a long-term trend shaping the manufacturing industry for years to come. Here, we are solidifying our leading position in many ways being at the forefront of our customers' needs. Key milestone this year includes the signing of second 200 megawatt electrolyzer in Europe and the electrification of 2 air separation units in China.

Then, of course, strategic acquisitions. Beyond the targeted 13 bolt-ons to increase local density, we reached a major milestone in 2025 with the acquisition of DIG Airgas in South Korea. This is highly strategic, providing us with a leading position in the world's first largest industrial gas market, a market expected to double over the next decade. In summary, while the first 3 engines fueled our growth by EUR 5 billion of investment backlog, the addition of the DIG acquisition and our bolt-on strategy brings our total capital deployment to nearly EUR 8 billion. Every euro of this is dedicated to securing future growth with return on investment remaining our absolute priority.

Turning to Slide 9. Let's look at the exceptional positive momentum in our Electronics business. This is a key structural growth driver where Air Liquide is uniquely positioned. Over the past 24 months, we have converted demand into a record of EUR 1 billion in CapEx through new projects signed worldwide, accretive on margin. But the pipeline ahead is even more significant. We are currently tracking EUR 2 billion in active opportunities targeted for signature in the upcoming year.

To give you a sense of scale, Electronics now accounts for over 40% of our 12-month investment opportunities, with a heavy concentration in the high-growth markets of Asia and the U.S. These recent wins powered by our leading-edge technologies do more than just grow the business. They firmly reinforce our position as the global #1 in electronics.

On Slide 10, we are committed to converting this increased performance and growth pipeline into value for our shareholders. These are not just words. Supported by our Board of Directors, we will propose to increase the dividend to EUR 3.70 per share at the next general assembly. This represents a significant increase of 12% compared to last year. It continues our long-term track record of almost 8% average annual growth in dividend per share over the last 20 years with a clear acceleration over the past 3 years, reaching almost a 40% increase.

In addition, the Board has decided to propose to proceed with a 1-for-10 free share attribution in June 2026, subject to the authorization of course, of the next general assembly. These new shares will be eligible for dividends starting in 2027 further compounding shareholders' return. This balanced approach has delivered an average total shareholder return of 11% per year over the last 2 decades. Our original model and our focus on performance continue to turn operational success into sustainable return for shareholders.

Turning to Slide 11. Let's review our outlook. On the left, you will find our formal guidance for 2026, which remained centered on our commitment to performance. For 2026, we reiterate our objective of delivering an additional plus 100 basis points of margin improvement. In addition, to provide you with greater visibility into our long-term trajectory, we have decided to further raise and extend our margin ambition. This extension through 2027 implies an additional 100 basis points of improvement for the 2027 fiscal year.

With this, we are now increasing our total target to 560 basis points over a 6-year period. By expanding our ambition today, we are demonstrating our strong confidence in our ability to drive further performance. This is a clear commitment to delivering sustainable, long-term profitable growth and value for our stakeholders. We look forward to hosting a Capital Markets Day in the second half of this year, where we will outline our strategic road map and long-term financial ambitions.

Thank you very much for your attention. I now ask Jerome to drive you through the details of our financial performance. Jerome?

Thank you, Francois, and good morning, everyone. I will now review our numbers in more detail. So coming back to the full year now on Page 13, group sales delivered sustained resilient growth in a still uncertain environment. Energy pass-through turned into a slight tailwind, and there was no significant scope effect in 2025. DIG being closed in January 2026. So overall Gas & Services sales achieved a plus 2% comparable increase as did our newly consolidated Engineering and Technologies activity. Thus, overall group sales were also up plus 2% on a comp basis for the year with a slight uptick for Q4 at plus 2.5%.

So zooming into Q4 2025 on Slide 14, all business lines as well as all geographies delivered sales growth. Let us now review the Q4 activity for each of main geographies. I am now on Page 15. So sales in the Americas remained strong, up plus 5% on a comp basis. Large industry were strong and benefited from additional hydrogen volumes in the U.S. as well as solid Airgas and Cogen.

In Merchant, sales were driven by an improved pricing effect of plus 2%, supported by active pricing management at Airgas. Volumes were resilient with regards to gases, while hardgoods remained soft. Growth in Healthcare was very strong driven by sustained high pricing in the U.S., including U.S. proximity care and our intel core -- Intelli-OX service cylinder development. Growth was further supported by the increase of home health care patients in LatAm, together with solid pricing.

Finally, in Electronics, the very strong growth in carrier gases for new project start-ups and ramp-up was offset by high 2024 base in equipment and installation. Overall sales in EMEA were up plus 1% with continued very solid growth in Healthcare. Large Industry was flat. Solid airgases in Italy and South Africa and a favorable mirror effect on the customer turnaround in Q4 '24 in Saudi Arabia offset low hydrogen and Cogen sales, especially in Benelux.

In Merchant underlying sales were resilient, excluding transfer activity from GM&T. Pricing was positive at plus 0.8% despite the impact of the indexation on decreasing energy prices in bulk contracts and low pricing in Helium. Finally, Healthcare growth was robust at plus 4.3%. Sales have been supported by strong home health care activity, notably in diabetes, community care in Germany and sleep apnea.

Mix Asia posted positive growth in Q4. In Large Industry, low demand offset positive contribution from start-up and ramp-up in China and Korea. Sales in Merchant were flat. China posted growth despite helium headwinds. Sales in the Rest of Asia were somewhat mixed, but mostly low. Electronic sales improved by plus 5%. Growth in carrier airgas came mainly from start-up and ramp-up, in particular, in Taiwan and strong growth in materials were only partly offset by the equipment and installation comparison to a very high level in 2024.

I will now comment on our Q4 activity by business line on Page 16. In Merchant, we saw increased pricing at plus 3.2% in Q4. So overall volume were resilient in a subdued industrial environment. Large Industry benefited from start-up contribution, mainly in Americas and Asia and from a solid base activity in the Americas. EMEA and Asia saw overall low demand.

Page 17 now. There was a strong underlying momentum in Electronics at plus 6%, excluding E&I. Sales benefiting from a strong contribution from carrier gas, mainly start-up and ramp-up, in particular, in Taiwan and in the U.S. as well as solid materials performance in Korea and Taiwan. This growth was tempered as E&I sales normalized following a record year in 2024. Finally, in Healthcare, we pursue strong trends despite a high comparable in Q4 '24. Home Healthcare was again robust, supported by diabetes, sleep apnea and community care. In medical gases, sales growth was strong with steady pricing addressing inflation, especially in the Americas.

On Page 18 now, as Francois mentioned, the success of our structural transformation program has been again demonstrated by our improved operating margin. Results were even more impressive regarding Gas & Services OIR margin, which improved by plus 130 bps. Getting into the detail, purchase were down minus 3.6%, though stable, excluding the currency impact and the reclassification effect and the increase in energy price, particularly natural gas was offset by the decrease in purchase of material and equipment due to a decline in sales and goods.

Personnel expense were down minus 1.5% and showed a limited increase of plus 1.5%, excluding the currency impact in an inflationary environment that benefited from the reduction in headcount of around minus 5% since the beginning of 2024, supported by the rationalization plans across all geographies. Depreciation is aligned with the level of start-up and ramp-up. This has resulted in group operating margin improvement at plus 100 bps, excluding the impact of the energy pass-through.

On Page 19, now this margin improvement was supported by a structured execution plan based on the 3 pillars. First, Industrial Merchant pricing remains solid with adapting to inflationary pressure and amid pressure in the Americas and to lower energy cost in Europe. We have and we will continue to focus on price management above the cost curve. We have also executed a record level of efficiencies, delivering EUR 631 million in 2025, which is significantly above our yearly advanced objective of EUR 400 million. Thirdly, we're active in portfolio management. We closed indeed 13 acquisitions in 2025 and executed 3 divestitures with a continued focus on strategic, profitable and margin accretive opportunities.

Let us now review quickly the bottom of the P&L. I'm now on Page 20. Operating income ratio increased plus 3.5% as published. Excluding the currency impact, it goes by plus 7.7%, which is significantly higher than comparable sales growth, highlighting the strong leverage effect. Nonrecurring operating income and expense account for EUR 300 million, including restructuring costs for approximately EUR 200 million with the main parts in Europe.

Net financial costs were down slightly with a decrease in average debt outstanding and in factoring. The cost of debt now stands at 3.3%, slightly down from 3.4% in 2024. The income tax rate was at 25.2% and compared with 24% in 2024, impacted by an exceptional stock tax surcharge in France in 2025. Net profit growth was up 6.4% and recurring net profit, excluding FX, increased significantly by around plus 10%.

I am now on Page 21. We generated a record EUR 6.8 billion in cash in 2025. As you can see, our strong cash flow finance increased CapEx at EUR 4.1 billion gross value or EUR 3.7 billion net of asset divestiture as well as EUR 1.9 billion in dividends, which represents another record level for us. We are also able to reduce net debt, while net debt-to-equity ratio stood at 31.2%, highlighting the strength of the cash flow. Keep in mind now that this ratio will increase by more than 10 percentage points with the DIG acquisition, which closed early 2026.

On Page 22, you can see that recurring ROCE continues to ramp up well above our 10% advanced objective and this despite continued large investments to fuel our long-term growth.

On Page 23, although the DIG acquisition closed in January '26, in order to give you a complete picture with regards to the full project development, I will present the 12 months portfolio of opportunities and backlog, including the opportunities and site projects acquired with DIG Airgas. So industry and financial decision for the year remain at a high level of EUR 4.2 billion. Strategic financial decision of DIG Airgas will appear with our Q1 2026 decisions.

Our investment backlog now remains very strong at EUR 4.9 billion, which is now the fourth year in a row above EUR 4 billion. The backlog is very much and well diversified, including more than 70 projects across all geographies with approximately 40% of the backlog now being dedicated to electronics projects. Finally, our 12-month portfolio opportunities at a record high, EUR 4.6 billion.

The removal of the Exxon Baytown project is now compensated by the entry of new projects in Electronics and Large Industry as well as opportunities from DIG Airgas. The current 12 months portfolio now consists of more than 40% project in Electronics. And bear in mind that the portfolio beyond 12 months remains dynamic and totals above EUR 10 billion.

On Page 24, as mentioned by Francois for 2026, we're strongly aligned with our ambition to improve operating margin by plus 100 bps and confident in our ability to deliver recurring net profit growth at constant exchange rates. We now commit to a further expansion for OIR margin improvement in 2027 to reach plus 560 bps of cumulative improvement over 6 years 2022-2027.

Thank you for your attention. Back to you, Francois.

Thank you very much, Jerome. I believe we can start the Q&A.

[Operator Instructions] The question comes from the line of Alejandro Vigil from Santander.

Congratulations for the '25 results. The first question is about the organic growth. In the fourth quarter, we saw some acceleration of 2.5% from the previous quarter. How you are starting this beginning of the year? If you can give us some indication of the level of activity in the beginning of the first quarter?

And the second question is about the remuneration, there's a whole distribution. You increased double digit the dividends for '26. My question is about your considerations or your thoughts about the buybacks. At the end of the day, the level of leverage is still low. Looking at the opportunities, probably you have room to fund these acquisitions through the balance sheet. If you can elaborate on why to increase double-digit dividends instead of considering buybacks instead?

Thank you very much for all the questions. I will take the first one and Jerome will comment on the second point. So indeed, I mean, we have seen a pickup in the activity at the end of the year. This being said, I think in the current environment, we believe that we will be probably, and that's the main assumption, in the same kind of trend for 2026. So this time probably a soft growth. But if we just look back a little bit, we tend to see a more positive sign that could definitely, I mean, give us some uptick during the year, maybe not in Q1, but as we go during the year.

What are those? I mean, clearly, we mentioned electronics. And you remember that there has been a very strong comparison effect where the activity of E&I was extremely strong in 2024. So you have not seen the underlying trend. But clearly, we see the volume and the carrier gas contribution clearly picking up. We start also to see, I mean, some signals in some subsegments in the U.S. industrial activity. So again, we have to be cautious, but those could be positive signals coming later on during the year.

Even in Europe, and maybe Emilie will have the opportunity to talk more about that later on, we clearly, I mean, see that some sectors like chemicals are still in the middle of difficult time with some restructuring. But in the past few weeks, we have heard positive news regarding the steel industry, especially with new announcements for new plants, but also the start of some of the production lines. So I think all those could definitely contribute.

Again, our best assumption for our financial projection is that it will be basically the same kind of trend for 2026 as what we have seen for 2025. And we do consider that anything better than that would be an upside for us. And regardless of the environment, of course, we are absolutely committed to deliver the margin improvement.

And finally, on the outlook and the momentum, I think we have to keep in mind that we have a super high level of business development activity. We mentioned electronics, we mentioned also a large industry. We start to see, I mean, project popping up in the U.S., which is probably the effect of the reshoring. So all this should be good opportunities and potentially also further M&As of different sizes. So this is the outlook for 2026. Again, confident in our ability to continue to deliver the improved performance, I would say, regardless of the environment.

Jerome, do you want to talk about the increased dividend and our thinking behind that?

Yes. Thank you very much for your question. So you're right to point that plus 12% increase of dividend is a very good and a strong sign of confidence, and that's really the state of mind that we are today. We have also to bear in mind that when you come back to the different I would say, parameters, we can see that we have delivered nearly EUR 7 billion of cash flow. So this is strong. And the level of gearing today is quite low at slightly above 31%. So we have the means to distribute, and that's why we have decided, which is very much the result of our, I would say, improvement of our performance trend and the overall performance over the last year. So that's why we have decided. And you know this is also a sign that Individual shareholders like as well.

But to come back on your second question, our policy has always been very clear. Given this very strong cash flow improvement in the last years, our order of, I would say, allocation is first, and we want to continue to finance the CapEx and that's important because that's where when we earn projects, we want also to allocate on that. The second point is M&A and significant M&A and that's why we have also the means to accelerate and to acquire DIG at the beginning of the year.

And the last thing is on distribution on dividends, which again is a very strong one. So as it related to buyback, no, our current status is very clear. There is no taboo, okay? And this is something that we are looking. We basically continue to monitor the performance on the cash. And we have no specific announcement to make today, but we are looking at all options.

Now we're going to take our next question. And it comes line of John Campbell from Bank of America.

I will ask 2, if possible. So coming back to one of the points you made. You talked about potential positive signals in the U.S. in terms of activity. Can you perhaps elaborate on what those potential signals are? And maybe to give you an example, your U.S. peer recently discussed they see packaged gas volumes as a leading indicator of activity. Do you agree with that assessment? And perhaps how are those activity levels trending? That's my first question.

The second question, I noticed there was a big meeting in Antwerp, I think it was last week, to discuss economic competitiveness in the EU, and they have been caused to review the CO2 emissions levy that is placed on industry. Maybe perhaps in light of this, how do you see the level of engagement with potential customers, particularly in Europe when around the energy transition? And perhaps you mentioned that electronics is a large opportunity. Would you say that sort of electronics potential orders can match the scale of potential previous hopes for energy transition projects?

Thank you very much, John. I will ask Adam who is in the U.S. to comment on the merchant, but also the large industry and the electronics business probably. And Emilie will talk about the CO2 situation in Europe and how we see this. Adam?

Yes, absolutely. Thanks, Francois. Thank you, John. So if I look at activity levels in the U.S. and kind of building off of some of Francois's previous points about what we see, we definitely see some positive signals. So if I go kind of sector by sector and take the merchant business, we continue to see resilient gas volumes and we see in the merchant business where it's buoyed by the pricing effect that we have. We also see on the hard goods side, some potential tailwinds coming in 2026 around sectors like defense, for example, like space and the like.

So we see activity coming in various areas. We're still a bit cautious in that regard because, obviously, this depends heavily on certainty around tariffs and certainty around interest rates and the like. But overall, when we look forward, we see positive signals. I would say on the really positive side, what we see is, a strong shift towards more traditional investment opportunities in business development.

So when we look at business development, we can probably talk a little bit about this later, we see a shift from energy transition more towards the examples that Francois mentioned earlier around core investments and existing assets, where we see a lot of interest from clients and a continued very strong business development effort on the electronics side and in large industries going forward. So I would say we have definitely not seen a slowdown in the activity for business development. The customer engagement remains very high. And I'm quite optimistic about 2026. And I think this feeds into the backlog comments that Francois and Jerome talked about earlier and also the portfolio that we see.

Thank you very much, Adam. I cannot resist, I mean, to build up on what you mentioned about the space because there has been a lot of discussion recently about the opportunities in the space area. And indeed, we are very excited and positive on this because we are today in the space business, and we are probably the only player with covering the full chain from the oxygen-hydrogen supply, but also, I mean, krypton, xenon for satellite and all the technology from the launcher to the satellite. So as you may know, I mean, we have a strong position in Europe and also a presence in the U.S. In the U.S. alone, we have more than 180 customers in the space ecosystem. So we see the momentum, clearly, and we benefit from this. And there are indeed a lot of opportunities.

What we have to keep in mind, and I don't want to pull down, I mean, the excitement about this new opportunity is that some of the bigger opportunity may end up actually being a sale of equipment. So it's not, at this stage, traditional over-the-fence business. So there again, I mean, we are very well positioned. But let's not -- I mean, it's not necessarily comparable with the rest of the large industry or the electronics business. It may be a onetime sale of equipment for some of those projects. But again, very well positioned and ready to take the opportunities as we have done in the past years and months.

I turn over to another area, Emilie. Do you want to speak a little bit about Q2 and Europe and what we hear and see from customers?

Absolutely. Thank you, Francois, and good morning, everyone. So yes, we followed this Antwerp meeting last week carefully, and we were actually present in Antwerp. The chemical industry really did some strong speeches about competitiveness of the European industry and also on ETS, the CO2 tax Europe. So that created a bit of confusion. Just to remind everyone, a revision of the ETS was anyway due and flat for the second half of this year. So this is not new. But of course, the ETS price is impacting some of our customers positively or negatively.

For us also, I want to remind everyone, our own emissions are subject to ETFs that are covered by our long-term contracts and the cost of the ETF is passed through to our customers the same way energy is. So definitely, chemical industry is suffering right now from structural competitiveness gap, like was said last week in Antwerp. But there are also positive signs in Europe.

Francois mentioned one on steel industry. So on the steel industry, we see positive signs of picking up volumes picking up in January, in particular, more than we had seen in the overall 2025 year. This is helped by quotas and limiting imports to Europe and of course, the CBAM as well. We also see some positive signs in Germany, so not necessarily on the chemical industry, but in Germany overall with a bit more volumes and also a bit better business mood. Remember, we are very committed to Germany. We've announced investment of a large basin in electronics last year in Dresden. So this is positive.

And overall, we continue to have a strong backlog of projects in Europe as well. So we'll continue to work with the European Union, with governments to improve the competitiveness of the industry in Europe, but there are also positive signs that I just mentioned.

Thank you very much, Emilie. I think, John, you had kind of also a side question, which was the share of electronics versus energy transition. I think with what was mentioned by Emilie and also what we see in other regions like China, the energy transition is still alive. So there is still a pipeline of projects, a very robust project. Again, it's a long-term trend. So it's not by any means disappearing, and we are very well positioned there again. What we see, and that was your point, clearly, is the pickup in the electronics projects driven by the AI and the rate for capacity in chips, but also in memory.

And this is clearly accelerating in the past few weeks even and the need for sovereignty. That's why, I mean, we see most of the major region of the world, a very, very strong momentum. As of today, there is 40% of our backlog, which is the electronics projects. So you see there is a shift. They are gaining importance. We do expect this to continue to grow. This being said, again, there are some energy transition projects that remain.

So I think the takeaway probably from this is to have in mind that in the current time, having a very diversified portfolio and being able in terms of footprint and segment to be agile and to capture the opportunities wherever they are is really a differentiating factor and as of now, leveraging our #1 position in electronics is clearly the strength.

And the question comes line of Tony Jones from Rothschild & Co. There is no answer from Tony Jones' line, and we're going to the next question. And the question comes from the line of Alex Sloane from Barclays.

Two for me, please. The first one, just on Baytown. I mean you've been clear, that's contractually protected, no financial impact. But stepping back, do you see any broader risk of customer-led causes or deferrals across decarbonization projects in your backlog or opportunity pipeline? And what are you seeing in terms of customer decision cycles? And is your '26, '27 margin trajectory, assuming any change in conversion rates? That would be the first one.

And secondly, on electronics. Clearly, up to 40% now of the backlog and opportunity pipeline driving outsized growth. Can you comment on whether we should expect any material mix effect on margins from the outsized growth of this segment over the next 2 years? Are you seeing any change in the competitive dynamics in this segment as clearly it's driving most of the opportunity at the moment?

Alex, thank you very much. So briefly on the first one, no, we don't see projects which are at risk today in the portfolio, in the backlog. Again, I mean, all the projects have secure contracts, secure customer, secure fundings when they are registered in the backlog. You remember, we have been extremely prudent in the way we were accounting for the Exxon project. So there may be projects, which appear or disappear in the portfolio, but not in the backlog, so no incidents on our financial performance for 2026 and 2027.

On the second one, on the electronics, what we see are mostly carrier gas projects, which today represent 50% of the electronics business activities. So you see gradually, it's moving. And those projects in terms of margin should be accretive because in some of those projects, the energy is included. But in others, the energy is not included. So the margin ratio is higher. So when they will come on line and keep in mind that those project takes 2, 3 years to build, yes, they will have a positive margin contribution.

At the end of the day, what is very important for us is the return on the capital employed, and that's how we are making a decision. Yes, it's a competitive area. Many people are fighting for those projects. The good news is that given the volume of the projects, we can be selective and we are selective and we choose the battle basically where we have a competitive advantage and we can really create value for our customers. And when you look at 2025, we get more than our share of the new projects, and we are committed to continue in that way.

And the question comes from line of Martin Roediger from Kepler Cheuvreaux.

Thanks for taking my 2 questions, please. First, on energy supply. In case several energy suppliers within the European Union have a problem in providing you with energy, to which extent are you protected against that shortfall in energy supply? How is the compensation scheme? Is there any difference in the compensation scheme between the energy resource electricity and the energy resource natural gas?

And the second question also related to energy, on energy costs. I recall that a few years ago, you had EUR 3.5 billion energy costs on a global basis. Is that still the case? Is the split in energy still 60% electricity and 40% natural gas? Or did that change? And is that also a good proxy for the individual regions?

Martin, thank you very much for your question. I will ask Emilie who is a specialty of energy in Europe to speak about it. And probably, Jerome, you take the global view on the energy costs. Emilie?

Absolutely, thank you. So briefly, of course, energy is a very large part of our cost stack, especially in large industry. So it is important for us. We monitor that quickly on a regular basis, and we are protected by our contract with the pass-through clauses to our customers. And in case to answer more precisely to your question of a problem of energy supply, then it falls under the force majeure type of clauses we have in all our contracts with our customers.

Thank you very much. Jerome?

Thank you very much, Martin, for your question. So when you refer to EUR 3.6 billion, it was very much at the time where the impact after the beginning of the war in Ukraine started to have significant high prices on the energy cost and mainly in Europe and mainly on natural gas. So today, I would say that it is coming still above the level of pre-war. But the mix is related to the share between natural gas for hydrogen business, HyCO business, and electricity for other should be relatively close. And those, as said by Emilie, are fully secured and fully pass-through to the customer. So no big change in terms of the weight of those energy or consumed and presented in the cost stack.

And our next question comes from line of Georgina Fraser from Goldman Sachs.

It's one question, but I think it might be 2 or 3 combined. You have this EUR 200 million in onetime costs related to European restructuring measures for 2026. Could you please put some context around this number? What percent of European sales will be impacted? Are there any networking effect implications? And are these measures in line with existing customer plans? Or is Air Liquide moving independently?

Thank you very much, Georgina. So Emilie, do you want to talk a little bit about how you want to transform and to adapt our footprint in Europe and what you have launched?

Absolutely. Thank you. So in Europe, we've well embarked on the structural transformation launched at the group level since 2024, so we are adapting our cost structure to the level of activity into the volumes, and we are restructuring. So maybe I'll give you some elements. First, on the organization and processes. So streamlining our organization. That is what we are doing, removing layers of management, simplification of our organization. And for instance, we moved from 4 clusters to 2 in Europe. If I include med gas that we integrated and merged into the merchant activity to create synergies, so we now have all the med gas activities under the same operational and management team as merchants in Europe.

So this restructuring effort is taking place in all parts of Europe. The idea, like I said, is really to adapt the cost structure to the activities, moving some tasks to the GBS as well. This is an important part of our transformation and also really restructuring to be prepared for the long term to be more profitable over the long term. So this is structural. We're also streamlining our processes and tools, having the same way of doing things across Europe, one single state-of-the-art ERP across Europe. And finally, also using more and more AI to automate, to optimize our operations in all domains, customer care, call centers, in sales, in safety, in industrial part of the activity.

Thank you very much. So that's for Europe, which is the bulk of the EUR 200 million. I mean I think this is 70% of that. There are other things which are similar in other parts of the world. What is absolutely key is that in this world, which is transforming, we want to anticipate. So part of it is to adapt the footprint, and that's what Emilie has mentioned. And we want to do that with courage, with determination in a respectful manner for our employees and for our customers because those are the values of Air Liquide, but we have to do it, and we have started and already done that in several cases, and we will continue to do that.

At the same time, and that's the positive news, we continue to invest in leading segment and to support and to drive this transformation, as we mentioned before. And as a matter of fact, in the past 3 years, we have invested more than EUR 3 billion in Europe, showing that we are positioning ourselves to be able to be a key partner and key supplier for the transformed Europe industry that is being built. So thank you very much, Georgina, and good to hear you. Next question, please.

And the question comes from line of Chetan Udeshi from JPMorgan.

The first question, I was just -- sorry my first question is on your investment opportunities and backlog. I think you have included the part from DIG now in those numbers. And I was just trying to see the underlying shift if I remove DIG. And it seems for the first time, maybe in many quarters, sequentially, the backlog and investment opportunities are actually down versus Q3. And I'm just curious, is this all because of the removal of the Exxon project? Or do you actually see that the incremental opportunities are probably slowing?

And just second associated question. You got this compensation from Exxon project in 2025 because it's been terminated. Did this have a positive impact on your second half margins? Because I see there's a big jump in the other income in the second half of '25, and I'm assuming almost all of that is associated with this project. If that's the case, if you can quantify?

And last question, simple. I don't see any guidance on start-up revenue this time. So maybe if you can just help us what do you think we should have in mind?

Thank you very much, Chetan. Thank you for your questions. I think Jerome will be pleased to answer the 3 questions. I may complement if needed, but go ahead, Jerome. The first one on the DIG and the contribution of DIG and the backlog.

So it's very simple. When you took the backlog of EUR 4.9 billion today, you have about EUR 200 million of backlog coming from DIG, okay? So EUR 4.7 billion plus EUR 0.2 billion. And you recall, Chetan, it's very much aligned with what we said last time during the call when we made the announcement of DIG, that there was some CapEx underlying. So that's very much aligned which is showing that basically a very good trend on this opportunity. On the portfolio of opportunities, you have a total of EUR 4.6 billion, a record. And that does include about EUR 800 million of DIG. So I hope it's quite clear.

And just Chetan, on this one, on the backlog from one quarter to another one, in my point of view, there is no worries. Basically, this is a normal life of a pipeline of the project. You have the projects which are exiting because the projects are starting up. So it's normal that depending on the timing, they go up and down. So the general trend is a very solid backlog, which is continuing to increase. If you look at a year-to-year basis, it's plus 15%, as I mentioned. So from that point of view, absolutely no worries.

Exxon contribution for the year?

So I hear what you said. So basically, it's neutral on margin because the compensation we had from the customer as basically covering our consolidation costs and so on. So that's basically neutral on margin for 2025. That's what you have to bear in mind. You have also to bear in mind that we have no financial exposure on that, that's basically it, okay?

And your last question, start-up guidance for 2026. So we have not disclosed this contribution for 2026 for a few reasons, Chetan. First, Francois explained that many times, there is shift today in contract structure. The fact that we have some energy transition projects, which have increased, which are going more and more into a tolling style contract, basically is polluting the fact on this contribution. So that's the very first point.

The second point is, as you know, there is geographical energy volatility, and disparity in energy pricing. So basically, as we are showing this number with energy contribution, it's create artificial difference in sales contribution from the same level of CapEx, which gives difficulty to estimate future sales contribution, the second reason.

And the last reason, by the way, if I may, Chetan, none of our competitors currently disclose its contribution from start-up and ramp-up. So all these different elements make us the conclusion that it was not super relevant at this stage. We are looking potentially as other indicator review. We see maybe on EBIT level and so on, but it's a bit early to say.

But the main reason, clearly, Chetan is that it's becoming a proxy, which is less relevant to predict the growth overall for the reason mentioned by Jerome, but you mentioned energy transition. But as a matter of fact, it will be the same with the electronics project because some of the current sales, it has energy included, others do not. So again, the traditional way of looking and predicting the sales with the amount of investment does not work anymore. We'll try to find a way to help you to do your forecast, but that's why today we are dropping this proxy.

All right. Thank you very much. I think we still have time for 1 or 2 questions. We have many more questions. So go ahead.

Now we're going to take our next question. And it comes from Jean-Luc Romain CIC CIB.

It relates to the cement industry. When we look at some of your clients or partners in the industry, there are several projects to decarbonize the cement plants And your CryoCap technology is all over the place on their website. Could you give us an idea of what's moving towards a decision? What's still a long way ahead?

Thank you very much, Jean-Luc. Emilie, do you want to speak about this?

Jean-Luc, on the cement industry, this is one of our key growth opportunities for the future, like you said, around our CryoCap technology, proprietary, and we are really the leader in the carbon capture technology. So the discussions remain active with our potential customers in the cement industry. They are continuing on their journey, knowing that they have all the commitment towards carbon neutrality by 2050. There's no way they can achieve that without carbon capture. So we continue the discussion with all of them.

Of course, it depends now on FID to answer precisely your question. It depends on ETS price, on the regulation subsidies in place, and also on the whole chain, it's not just about the capture, but the capture, the transport and the sequestration that need to also be ready and also missing a few still mechanisms like CCSD to really make it to the final investment decision, that again, momentum is still there with all our cement industry players.

Thank you very much, Emilie. So we'll take 2 quick questions, 2 more questions, please.

And now we're going to take our next question for today. And the question comes line of Sebastian Bray from Berenberg.

Can I ask about the backlog composition? Because leaving aside the question of how much is electronics and how much is associated with other end markets, have there been any changes relative to what Air Liquide has done historically in terms of contract length and the split between large industries and on-site that include parts of electronics in that and merchant gases.

The reason I ask this is that Linde has pretty high backlogs close to record. Their products looks fairly healthy, excluding the new energy parts and Air Liquide is at record levels. And if we hit 2 to 3 years' time and everybody is bringing online new projects, does that pose an issue for merchant pricing, given that a lot of these large on-site projects are going to be adding capacity to merchants?

Well, thank you very much, Sebastian, for your question. So as you know, we are extremely disciplined in the way we are evaluating projects. So every time there is a project, we look at, of course, the merit of, I would say, the anchor customer when it's a large industry or electronics customer. And if there is a potential upside with the merchant, we do consider that after careful consideration of the market potential and the local situation. And what you have to take into account here is clearly that the merchant market is a local market. So it depends on the situation.

And with those new investments, you can bring very effective new source of products in regions where we are lacking products, and there are still quite a bit of those globally. So today, I don't see a threat at least from the Air Liquide point of view, I cannot speak for our competitors. But are extremely careful and disciplined in the way we justify new merchant investment. And again, it's based on the local situation. So that's how we are looking at things for the backlog, again, mostly driven for us by large industry and electronics.

Thank you very much. Last question, please?

And now we're going to take our last question for today. And it comes line of James Hooper from Bernstein.

I've got a couple, please. First one is on the 2027 margin target. Great to hear the extension of that target. Are there measures that will deliver this going to be the same as the ones driving 2025 or 2026 or they may be different?

And then a second question. I'd like to pick up on some of the -- about lower demand in Asia in large industries. Can you give us an indication of what's happening on the ground in Asia, particularly China? Is there any effect from overcapacity and anti-involution? And also a quick update on the helium market, please?

I will start with the last one maybe on Asia because we didn't talk so much about Asia. Right now, again, we see a clear momentum in electronics across the board, and this is for a new project, but we see also picking up, clearly. So that's a very positive one. When you talk about overcapacity, mostly, it relates to what we have seen in the manufacturing in China. And we see some slowdown or maybe extended turnaround from some of the customer in China. But I would say on average, we are probably less impacted than other players because of the quality of the portfolio of companies we have.

We have been extremely discipline in selecting over the years, I mean, the top-tier customers, which are the ones typically who have the best competitive situation. This being said, we do expect a further consolidation in some sectors, which overall should bring benefit to have cleaner, more efficient manufacturing capabilities for China and to export.

Regarding the helium situation, again, globally, I mean, we are in a situation where there is low demand compared to the supply for helium. Keep in mind that for Air Liquide, and that's not necessarily the case for all our competitors, helium is only 3% to 4% of sales and 80% of our business is based on long-term contracts, both in electronics, which is still growing and Industrial Merchant. So yes, we are impacted mostly in some regions. China is clearly one market where we see a decreasing volume and decreasing pricing. But overall, our helium business is still strong and well resilient.

Regarding the 2027 margin objective, I think really what you need to take out of that is the confidence that we have in our ability to continue to provide margin improvement. And the reason that we are confident it's because this is based on the structural efficiencies, which are the results of the transformation program.

If you step back, you have seen that 3 years ago, I mean, a lot of the margin improvement was coming from the pricing. The pricing is still there, and we have really moved up our capabilities to secure pricing whenever it's possible. But with the lowest inflation, the pricing contribution is decreasing everywhere. But what we see is a pickup of the efficiencies, again, almost 30% more this year compared to last year, and we do expect this to continue.

As I mentioned today and previously, we are at the beginning of the journey for many of the transformation initiative. So there is more to come in '27, '28 and so on, maybe not always at the same rate, but for 2027, we are very confident with this margin improvement.

So thank you very much. This concludes our session. Thank you very much for all your insightful questions for sure. In conclusion, I would like to say that after a strong performance in 2025, Air Liquide entered 2026 with a proven model, record backlog, momentum in transformation and clearly, extended horizon for profitability. And we are all ready to build on this momentum. Thank you very much for your attention. I wish all of you a very good day.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good morning, ladies and gentlemen, and welcome to the Air Liquide Third Quarter 2025 Revenue Conference Call. [Operator Instructions]

I will now hand over to the Air Liquide team. Please begin your meeting, and we'll be standing by.

Good morning, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you very much for attending the call today. Francois Jackow and Jérôme Pelletan will present third quarter revenue. For the Q&A session, they will be joined by Emilie Mouren-Renouard and Adam Peters, both Group VP overseeing, respectively, EMEA and North America. Adam is on the phone with us from the U.S. In the agenda, our next announcement is on February 20 next year for our full year 2025 results.

Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It is my pleasure to be with you today to walk you through the very solid achievements of the group in the third quarter of 2025. Of course, we are still operating in the same turbulent environment that has defined the market since the start of the year. But despite these conditions, I'm glad to report that Air Liquide is maintaining a very strong momentum. We are delivering consistent sales growth that demonstrates far more than just resilience. We continue to grow. Also, we are firmly confident in achieving our margin improvement target, driven by the structural transformation underway across the group.

At the same time, we had again significant success in business development, securing new contracts and reaching a new record high backlog.

Let's turn to Slide 3. The numbers speak for themselves. Sales grew plus 2% on a comparable basis, maintaining the same positive trajectory in spite of everything. All the key indicators are very well positioned and reflect our strong performance again this quarter. IM pricing remained accretive, increasing above 3% in Q3. This shows a sequential increase versus Q2 2025 demonstrating effective management in a demanding environment. The momentum on efficiencies remained very positive, with more than 20% growth compared to Q3 last year. This means that over the 9 months, we have already delivered 15% more efficiencies than in the whole year 2022.

This performance is highly encouraging as it clearly validates that the structural efficiencies from our major transformation program are delivering. I personally like this very much as it allows us to positively improve the margin while accelerating our investments for the future. Cash flow remains extremely robust, growing plus 7%, excluding the currency impact and our ESG KPIs remain on track in Q3. Finally, our investment backlog reached a new record high level, approaching EUR 5 billion for the first time in our history. This is a solid tangible indicator of future growth, which will begin to flow through as the projects under construction are going to start up.

In summary, this has been a very solid quarter, perfectly aligned with the positive trend of the first half. These results provide clear evidence that we are firmly on track to deliver our commitments in terms of both current performance and future growth. You remember that last quarter, we introduced the 4 growth engines of the group. This is not just a concept.

When we look at the Slide 4, we see concrete wins and illustration this quarter of how those 4 growth engines are in action. First, we're talking about low CapEx growth by getting more out of our existing assets. This quarter, we signed, for example, new contracts to supply hydrogen to the 2 of the largest U.S. refiners. This is a great example of low CapEx growth and the benefits of Air Liquide assets. We will leverage our existing pipelines and infrastructure for new additional sales. While limiting the investment to only USD 15 million. We're simply integrating new compression and distribution gear. Capital intensity is around 0.5% for this project. These types of projects are clearly a reservoir of growth in a lower volume environment because it let us boost sales without the usual capital expenditure.

Our second growth engine is investing in our core activities. Our electronics leadership is a key part of this. We closed 2 major long-term contracts with the leading semiconductor manufacturer this quarter. First was a EUR 250 million investment in Western Germany, our largest ever electronics investment in Europe. The second was EUR 130 million investment for 2 Carrier Gases units in Singapore. An additional illustration is in home health care, which is another growth driver of our core activities. In Q3, we signed a new large contract in Spain to provide home health care for patients with chronic respiratory conditions. We're investing in an innovative approach, where using unique proprietary digital and AI solutions to ensure cost-effective personalized care.

In the current very variable environment, we expect home health care to be a steady growth driver for the group. The third engine is the energy transition. A great example, confirming our leadership position in this market is the EUR 500 million investment we decided this quarter for the ELYgator project in the port of Rotterdam. This massive 200-megawatt electrolyzer will notably supply TotalEnergies with green hydrogen through a long-term contract. Finally, our fourth growth engine is acquisitions. In Q3, we announced the agreement to acquire DIG Airgas in South Korea. This is highly strategic because it gives us a stronger foothold in the world's fourth largest industrial gas market, which is expected to double in the next 10 years.

Critically, DIG's footprint and operations are also a perfect complement to our current activities in Korea. At this stage, the closing process is going as expected. We also continued making small targeted bolt-on acquisitions to increase density in our existing operations, like the announcement yesterday of an acquisition to strengthen our footprint in India. All in all, the first 3 growth engines are currently fueling our EUR 5 billion backlog. When you add the major DIG acquisition and our bolt-on operation, that figure gets close to EUR 8 billion in total capital deployment securing future growth. Return on investment remains, of course, a key priority for the book. In spite of the increased investment in the past 3 years and thanks to the improved margins, our recurring ROCE remains at plus 11% at the end of September, above the 10% threshold of the advanced target.

I will conclude on Slide 5, showing the robustness of Air Liquide equation in the current environment combining very strong delivery of today's performance and steady ability to invest for the future. We proved once again in Q3 that we are on track, thanks to our proactive management of our transformation and strong position on growth opportunities. We are highly confident in our ability to navigate the evolving global landscape and continue delivering value to our shareholders. Thank you very much for attention.

I now ask Jerome to present the details of the Q3 performance.

Thanks, Francois, and good morning, everyone. I will now review our numbers in more detail. So coming back to Q3, I'm now on Slide 7. Group sales have been resilient overall with a growth of plus 1.9% on the comp basis excluding energy pass-through and ForEx. There is no significant external scope effect in Q3 2025. Published sales are down minus 2.4%, widely down by a negative ForEx effect of minus 4.2% mainly due to USD and nearly neutral energy pass-through energy effect of minus 0.1%. So Gas & Services sales achieved a plus 1.9% increase year-on-year and Engineering & Technology external sales increased plus 1.7%, while resources are still mostly dedicated to building the many internal projects in the backlog for industry and electronics.

I am now on Slide 8. Growth in Q3 for Gas & Services has been driven by the Americas, while EMEA and Asia were broadly flat. On a business line standpoint, we can see that Healthcare and Industrial Merchant growth in Q3 and electronics also a strong growth driver if you exclude the sales of equipment and installation. This, once again, highlights the value of our diverse development strategy, capitalizing on the complementarity and right balance among our different business lines and geographies. This resilience, coupled with existing capacity, strong growth driver and increasing performance as explained earlier by Francois, positions Air Liquide very well for the future. Let us now review more specifically the activity of each of our main geographies in Q3 2025.

I am now on Slide 9. Driving growth sales in the Americas delivered a strong plus 5% on a comp basis. Large industry posted strong growth despite a high comparison basis in Q3 '24. The business line benefited from a continued ramp-up in air gases from a major air separation units started in February 2024, solid start-up contribution as well as lower turnaround during the period, which more than offset lower base business, especially hydrogen with less import of EV fuels. As a side note, you may expect a few more turnarounds in Q4. In merchant sales were driven by a positive pricing effect of plus 4.5% year-on-year, which improved sequentially from Q2. Pricing was driven, especially in North America by adjustment on cylinder rental in some regions at Airgas. Gas volumes were flat and showing improvement were less negative. Bolt-on acquisition also contributed to growth.

Strong growth in health care was achieved through higher pricing in the U.S. and LatAm, coupled with the growing base of home health care patients. This growth was further supported by deployment of the Intelli-OX differentiated solution. It offers a digital gauge that provides caregivers with a direct reading of the remaining oxygen time, an excellent example of value creation for innovation. Finally, Electronic sales posted normalizing E&I sales versus the record high level last year, offsetting strong growth in Advanced Materials and Specialty Materials, Carrier Gases were resilient. Sales in EMEA were resilient with continued solid growth in health care. Large Industries posted a slight drop. Hydrogen sales were down in Germany as were cogen in Benelux.

However, positive air gases overall and robust hydrogen in the Middle East provided a partial offset. In merchant, sales were flat, with still a solid plus 1.5% pricing despite lower energy indexation in bulk. Volumes were driven down by liquid CO2 and helium as anticipated. Bulk volume showed resilience as did packaged gas. To be noted, excluding the negative impact of helium, merchant sales in Europe were up plus 1%. Finally, health care steady plus 4% growth was supported by an increasing number of patients in home health care, which serve diabetes, sleep apnea and community care needs in Germany. Med gas sales remain stable. Asian sales were resilient. In Large Industries, there was a continued contribution from start-up and ramp-up in China and Korea, but offset by low base business on a high comparison basis in Q3 '24.

Sales in merchant were down minus 1% or up slightly excluding the impact from helium. The region saw improving pricing at minus 0.5% versus minus 1% in the second quarter of this year. China posted a positive plus 2% sales growth and plus 4%, sorry, excluding helium, with the growth mainly driven by bulk and on site. Pricing remains weak in China hampered by helium and the deflationary environment as anticipated. Activity in the rest of Asia was more mixed. Electronic sales were flat overall, but were above plus 6% excluding E&I, which is normalizing after a record year. Carrier Gases maintained a double-digit sales growth and Advanced Materials show growth while Specialty Materials were soft.

I will now turn to Slide 10, where I will comment on our Q3 activity by business line. In merchant, we saw an increase in pricing to plus 3.1% compared to plus 2.7% in the second quarter. Overall, volume in gases were slightly up, including bolt-on acquisition and hardgood volumes were less negative improving sequentially. The main end markets posted volume growth were secondary in electronics and packaging globally, materials and utilities in the U.S. and automotive in Asia. In Large Industries, start-up and ramp-up contribution offset lower demand, major ramp-up indeed have positively contributed in the U.S. and Asia, offsetting lower demand, mainly in EMEA and Asia while the base business was more resilient in the Americas.

Slide 11, Electronics, where we continue to build our leadership position continues to grow at plus 6% excluding E&I. Carrier Gases delivered indeed strong growth with 8 main start-ups year-to-date, mainly in China, Taiwan and Japan. Carrier Gases and solid Advanced Materials in China and U.S. almost fully offset normalizing E&I sales, which are more cyclical and compared to a record high in 2024. Electronic Specialty Materials were flat overall. Finally, Healthcare continued strong growth trends, again high -- sorry, high comparable rates last year. Growth mainly come from home health care, notably in Europe and South America, for medical gases in the Americas and from Specialty Ingredients.

On Slide 12 now. As a reminder, our margin improvement objective is supported by a structured plan, leveraging our unique strength and based on 3 pillars. First, IM pricing continued to be solid despite a high comparable basis as you see on the graph. To be noted, we have an uptick in pricing from Q2 to Q3 despite the lower index in bulks in EMEA, and we continue to focus on price management and pass-through price versus cost dynamics. Regarding efficiencies, as Francois mentioned, the strong performance of plus 23% increase demonstrates that the structural initiatives from our major transformation program are delivering and strongly supplementing our ongoing efficiency program. This is -- this impact is, of course, positive on our margin as it helped to compensate for some headwinds such as unfavorable currency impact.

Lastly, we have continued to actively manage and optimize our portfolio. We have indeed closed 8 bolt-on acquisitions year-to-date as well as announced our agreement to acquire DIG in Korea, in South Korea, as Francois mentioned. Meanwhile, we executed 3 divestitures, Air Liquide continued to focus on strategic, profitable and margin accretive opportunities.

On Slide 13 now, the 12 months portfolio opportunities remained stable at a high level of EUR 4.1 billion. Our total industry and financial decision for the quarter were also higher at EUR 924 million, this including the FID for the ELYgator in the Netherlands, the electrification of an air separation unit in China and a large carrier gas project for a leading electronic customer in Germany. Finally, our investment backlog reached a new record level of EUR 4.9 billion with investment decisions entering the backlog more than [indiscernible] leaving the backlog. Projects in Electronics represents 1/3 of our total backlog in line with our growing leadership in the segment.

We achieved EUR 233 million sales contribution for start-up and ramp-up year-to-date, and we remain confident to deliver at least EUR 310 million by year-end. To conclude, in spite of the current turbulent environment, thanks to the ongoing demonstrated resilience of our business model and our disciplined self-help actions, we confirm our guidance.

Thank you for your attention. We can open the Q&A session. Back to you, Francois.

Thank you very much, Jérôme. So let's start the Q&A session. Thanks.

[Operator Instructions] And now we're going to take the first question. And it comes from the line of John Campbell from Bank of America.

Two, if I can, quickly, I wanted to get a sense for the feeling you maybe have on the activity levels in the fourth quarter. It looks to me like organic growth in the third quarter was slightly stronger perhaps than some had expected, et cetera. It looks like in several areas, such as Large Industries or Healthcare, the year-on-year comparison basis gets sequentially noticeably easier in the fourth quarter relative to the third quarter.

So any comments you could perhaps give on the fourth quarter and even looking further ahead, perhaps into 2026 for the Electronics segment, where organic growth has been perhaps slightly solid by normalizing equipment sales? That's the first question. Second one, if I can, relates to any of the latest details you can give us on amendments related to the corporate tax rate in France. I noticed there were some potential revisions in an amendment yesterday evening.

Thank you very much, John, and good morning. So regarding the trend, I think, overall, we are in the same kind of environment. What we are seeing in Q3 is to some extent, an acceleration of the growth in some segment at the end of Q3. So to some extent, Q3 was better than what was maybe expected at the beginning of the Q3, so that's positive news for sure. We do expect Q4 to be above Q3, but again, in the current environment, we have to be cautious. I mean there's so much valuation in the end market and so many things happening from 1 week to another one, I would say.

But overall, the trend should be positive. We do expect, I mean, momentum to continue in the Americas overall and also some comparison effect being positive in Europe overall. Regarding the key markets, indeed, as we mentioned, I mean, large industry should see some pickup and we do expect the same probably for industrial merchants, mostly driven by the U.S., as we have seen in the past quarter. Electronics overall is probably likely to be flat. Let's keep in mind what Jérôme has mentioned about the comparison effect, which is still quite strong. And Healthcare is remaining very strong and should continue its progression.

So all in all, Q4 should see, I mean, continuous momentum and improvement. But again, in the current environment, let's be careful. You know very well that our strategy has been very clear in that -- in the current environment and regardless of environment, we are determined to improve the margin with many actions which are self-help actions, the transformation program that we are doing is contributing clearly. So that should give us good visibility and good confidence for Q4 regardless of the environment. Jérôme, comments on the French effective tax.

Thank you very much for this important question. I would say for the question you raised on what's happening right now, it's a bit difficult to comment. It's, I would say, discussion. We have potentially amendment, but nothing has been voted yet, so I will not comment on the impact of 2026. What I can tell you at least for 2025 and something we already mentioned, the effective tax rate that we can expect for the year -- for year 2025 should be around 26%, which is something which is coming mainly from the impact of the [indiscernible] 2025. But for 2026, it's a bit early and of course, we'll come back, I would say, later when we have more certainty on the topic.

We are going to take our next question and it comes from the line of Alejandro Vigil from Santander.

The first one is about the investment backlog you highlighted in '25, the contribution of this backlog is about EUR 300 million, EUR 340 million. If you can give us some guidance or some outlook about next year, your expectations of the contribution from the new projects from the start-ups. And the second question is about the self-health programs you mentioned about efficiencies. We have seen this acceleration of more than 20% year-to-date. If you can elaborate about which are the sources of these additional efficiencies and the outlook for next year as well, if you can continue to generate these efficiencies.

Jérôme, do you want to take the 2 questions?

Yes, Francois, I can take it. So as related to the backlog, you're right, the backlog is a record high, nearly EUR 5 billion. It's a historical backlog. And of course, just to remind you, is made by projects that are signed so that will deliver growth in the coming years. And we are pretty clear that for this year, the impact will be at least EUR 310 million. And that's where we stand right now for the confirmation. So it's -- as you see, it start to be significant contribution on the top line. As related to efficiencies, are you right also, we are very happy with the trend on the efficiency and plus 23% versus last year.

As Francois said, we are at a number that represented the full year impact of 2022. Just have in mind that these efficiencies are rising. There are multiple. That's the result of the transformation program that we have -- that we are executing right now, that we already commenting many times. There are different holders. There is, of course, an acceleration in industrial efficiency. You know that we have created the group industrial efficiency -- group industrial direction. And this is accelerating, and we are very happy with the trend, it's coming.

We have also an acceleration in procurement as well, which is also delivering and we have also a contribution for all the restructuring measures that we are setting, which are also delivering. So all in all, plus 23% is a strong number, and it's much better than what we are able to do in the past, and we can be very happy with the, of course, the impact on the margin that we're translating into.

Now we'll go and proceed to our next question, and it comes from the line of Thomas Wrigglesworth from Morgan Stanley.

Two, if I may. Firstly, on the Large Industries Europe, you call out hydrogen in Germany. Is that purely the force majeure? Or are you seeing other impacts weighing on that market? And then secondly, kind of more of a longer-term question. Obviously, CBAM coming in next year, do you think that will drive an acceleration and -- in the investment opportunities that you see? Do you think people are going to start to react now to CBAM and there's been a wait and see? And alternatively, do you think people now start to look to shift capacity out of Europe into other geographies because of CBAM and the fact that it's actually more efficient to do more -- environmental/green/renewable projects in the Middle East and the U.S. Any comments there would be very helpful.

Thank you very much, Tom. I will ask Emilie to speak about the hydrogen in Germany, and I will comment on the CBAM.

Yes. Thank you, Francois. Good morning, everyone. So on the hydrogen in Germany, so it's mostly related to events at our customers indeed. So we shouldn't read too much into that. Overall, in Germany, the business and the activity was resilient, which given the current context is already a good news. And you've seen some good level also of project development. And you've seen recently the [indiscernible] announcement where we are investing EUR 250 million in Germany in the semicon industry.

So you see the economy, despite the headwind is resilient. We also hope that the infrastructure fund driven by the government, the German government, will deliver results and positive impact on us. So we shouldn't read too much into this hydrogen mostly due to customer requirement.

Thank you very much, Emilie. So regarding CBAM, you're absolutely right, this is coming into force in Europe. So it's going to create new environment. And it's a little bit early to say exactly what's going to happen in the industry, but if I step back and I look at the impact for Air Liquide, I think overall, it's going to be a positive trend because at the end of the day, it's really putting value on carbon and low carbon products. So today, we see industry which are getting organized in Europe to drive decarbonization for sure.

But what we see also, and I had many discussions with customers in different geographies that they are starting to decarbonize their own processes to be able to import to Europe. And this is the case for sure in China, which is driving decarbonization opportunities in China, but also in the Middle East and in the U.S. And as you know, that we are clearly, I mean, a leader in terms of solutions to decarbonize the manufacturing processes, we will capture the opportunities being in Europe or being in the other countries. So all in all, I think it's a very positive signal towards the decarbonization of the industry.

[Operator Instructions] And the question comes from the line of Tony Jones from Rothschild & Co.

I've got 2 questions, if I may, too. On comparable growth, good results at 2%, but I just wanted to break it down into the growth factors. So if I weight a price from merchants, that gets me to about 1.3%, 1.4% of the group. New projects just over 1%. So that implies underlying volumes down around 1%. I think firstly, is that correct?

And then secondly, is that the right sort of run rate we should be thinking as we go into early part of 2026. And then secondly, my question is on uses of cash. And L'Air Liquide has not got a lot of debt and your choices are either cash return or CapEx. But instead, we've seen more acquisitions, could you talk a little bit about the selection criteria for that? And when you're making your acquisitions, is this about accessing new growth or accretive margin expansion?

Thank you very much. For the first question, Jerome, do you want to comment on that, and I will make some comments on the strategy for the acquisitions.

On the comparable sales, we are basically having -- I can break into that rapidly by subsegment that would be helpful. then. In merchant, we have plus 2.7% growth with pricing at plus 3.1%, with import volume and large industry we have basically start-up contribution that offset low demand. Electronics, we have growth, but it's negative because we have a stronger E&I comparable last year and health care is growth really coming from volume and price.

So as regard to volume coming in the months to come, it's a bit difficult to say. We are quite cautious. But overall, we see better, I would say, better volume, especially in our goods. We're still negative range in the U.S., for example, but it's much lower than last year. So all in all, you can see that the trend in Q3 was better than -- now maybe you want me to talk about the cash.

I will talk about the more -- I mean, the strategy for the acquisition. So the first thing is that thanks to all the improvement in the profitability, as you mentioned, I mean the cash flow, the group has increased significantly. So we have basically the means to deliver and to execute our strategy.

The first priority is to invest in our core business, and you see and Jerome mentioned it, we are deciding on new investment. We have a very strong backlog, and we can afford basically to take the opportunity and to seize the opportunities in our core markets and core opportunities. So that's #1.

#2, clearly, I mean, we have also the means to make acquisitions. When we are making acquisitions, there are different types of acquisition. There are the bolt-on acquisitions, which are mostly present in IM and in home health care. The purpose is to increase the density to take position to consolidate some key markets or sometimes to enter into new areas, which can complement what we have. typically what we have done in India is the illustration of that, a very good complementarity to our existing footprint, allowing to cover better, I mean, some key markets.

At the same time, I mean, there are some strategic opportunities, whether we see, I mean, the opportunity to take position in key markets. The one that we have done in Korea is exactly this, it's positioning us for the future and for the growth. But as I mentioned and Jerome mentioned that previously, of course, when we look at an acquisition, there is a strategic fit and the opportunity to grow and our acquisitions are there to grow the business and to develop the business.

But of course, we are looking at a positive contribution of those acquisitions either because those are existing business with good profitability or because we see synergies and integration and typically, the bolt-on acquisition, for example, the one that we are doing in the U.S. or in China, in this category, we can improve the profitability because of the integration in a much larger and more efficient organization. So once again, I mean, this is part of the capital allocation of the group targeting growth, but of course, contributing positively to the net profit improvement of the group.

The next question comes from the line of Chetan Udeshi from JPMorgan.

I had a couple of questions. First is on your pricing in merchant in the U.S. You're noting some of that is because of the higher cylinder rentals. So I'm just curious whether this is more a pass-through of higher running costs because I suppose you also have to pay more for sourcing the cylinders? Or is this real incremental sort of benefit for L'Air Liquide from higher rising in the U.S?

And the second one was in your large industries business, I'm a bit surprise that Asia underlying is weak because especially in chemicals, when we look at the production of chemicals in China, it's been growing very, very strongly at the expenses, of course, Europe. So I was surprised that Asia is actually not up in terms of on-site. So any indication on dynamics in Asia?

Thank you very much, Chetan, Adam, can you speak a little bit about what we see in the merchant in the U.S. and the good momentum overall?

Yes. Absolutely, Francois. Chetan, thanks for the question. So looking at the IM business in the U.S. in particular, and I'll speak to the pricing point as well. But I think we've seen, obviously, a resilience in the gas side which has been great, and that's maintaining well. And we've seen sort of an inflection point on a hard goods piece. And this is a positive piece that we've seen, particularly towards the end of the quarter. And a little bit early to say that there's a trend in terms of volumes on the hard goods side, but certainly a nice inflection towards the end of the quarter, which is great.

On the pricing, in particular, we always try to stay ahead of the cost curve. And so what we do is we monitor very closely, as you know, price pass-through and making sure that what we do from a pricing standpoint contributes positively to margins. So this is very well ingrained into our normal operating model for all of our associates across the U.S. in terms of our pricing campaigns, our pricing tools and the like.

And we maintain a good momentum in that regard. So even when we think forward about cost increases related to inflation and the like, our goal is to stay ahead of the cost curve and make sure that what we do from a pricing standpoint is accretive to our margins.

Adam. Regarding the large industry in Asia, I think, Chetan, what you should look at is clearly, I mean, the different impacts, we have seen a positive contribution of start-up of the business. But clearly, there has been a significant turnaround in some key facilities impacting us. So I think what you should read there is mostly, I mean the impact of the outage and the maintenance at some key customers, especially on the HyCo business, but also areas in some cases, especially in China.

So that's probably the reason for the uncorrelated performance of a large industry in Asia compared to what we see from the demand side. But again, it's mostly related to specific maintenance and turnaround at customer sites.

And are these turnarounds in chemicals, I suppose, because it's HyCo.

Yes. Those are mostly chemicals. So the HyCo, it's mostly the gas supply and the gas also is mostly for the chemical. So that's why you see this impact.

Now we're going to take our next question and it comes from the line of Jean-Luc Romain from CIC Market Solutions.

I would like to learn more information about your project...

Sorry, can you speak up, because it's difficult to hear you.

I'm trying. I would like to have some more details about your acquisition projects in India. How does this compare to the acquisition project in Korea. I think it's smaller, but I would like to have an idea of relative size between both companies. And my understanding is that the company you're buying in India kind of a subsidiary of -- one of the subsidiary of a Chinese industrial-based company?

Thank you very much, Jean-Luc. And I will ask Emilie to speak about this nice acquisition in India.

Jean-Luc. So yes, we've announced that we are in the process of acquiring NovaAir around this industrial gases company in India. It's a small acquisition. It's now EUR 100 million, so it's small scope store. So it's really very different, obviously, from the acquisition we are doing in Korea.

It's a bolt-on acquisition, like we said, and it's to both densify and extend our presence in India like Francois explained and remember, we are present or we've been present in India since 1992, both in the gas and service business as well as engineering and construction.

We have a department there, which is growing several manufacturing entities in India, and we just inaugurated our global capacity center there in Pune. So overall, this will expand our presence in India, which we consider to be evenly an area for growth. So it really well aligned with our growth ambition in this country.

And Jean-Luc, I think if I heard correctly, I mean you were mentioning, I mean, is that a subsidiary of a Chinese company. It's a private equity fund, or a PAG with the owner. So that's why maybe you saw that. But it was a private equity, or a fund who owned that company before.

We will take the next question and it comes from the line of Laurent Favre from BNP.

2 questions, please. The first one is on helium. It seems to be getting less to the point where Gazprom is reported to delay the second stage of the expansion and you're now talking about pressure in Europe as well.

Can you help us understand the magnitude of the worsening for you? And also, how do you see the risk of a spillover also coming to the U.S.? I understand the assumptions, but it seems that the assumptions are not really having an impact certainly on your European business?

And then the second question for Jerome, on the EUR 100 million positive impact from the accelerated cash depreciation in the U.S. Is it 100% of the potential for you at this stage? Or is there more to come? And also, can you talk about the magnitude of the equivalent measures in Germany? Because I think that's also something that they are working on from next year?

Thank you very much. For the helium overall, let's keep in mind that helium represents 3% to 4% of the turnover of Air Liquide. So in terms of impact on the sales, it's quite limited overall. We have seen the market being clearly, I mean, disturbed by, as you mentioned, I mean from the sourcing piece, I mean, Russia, and Gazprom with some products flowing in some regions of the world, which are not following the sanction on this. And also from demand side, where we have seen a lower demand in some key markets.

As far as Air Liquide is concerned, I mean we are managing this business very tightly and the impact on the negative in terms of volume and what we've seen some market on spot pricing is very limited. Keep in mind that we have worked a lot on the supply chain by diversifying, I mean, our sources of helium. We are not taking any product from Gazprom of course. But also having the cavern, which is for us a great way to manage the fluctuation between the market demand and the production side. And also, and it's very important in the current timing.

We have developed, I would say, original marketing approach in the past few years, where we have converted many of our contracts to medium-term to long-term contracts. So probably 70% to 80% of our volumes are under those type of contracts, which is giving us a very good stability and visibility in terms of market, and this is true for the high-end market, but also for the electronics market, which is growing.

So again, all in all, yes, there are some disruption in this market today, but I think we are managing that very well overall as far as we are concerned. For the [indiscernible] Jerome?

Yes, of course, thank you very much Laurent. Good to hear you. You're right. The recent adoption of the OBBB legislation, bonus tax, depreciation amounts for 100% tax for fiscal depreciation on new projects, which is a significant decrease because we have 60% in '24 and 40% in H1. So the impact in Q3, we are benefiting from a one-off positive cash impact of EUR 100 million, Q1, Q2 plus Q3 figure. That's where we are today.

But we will continue to benefit from this increase in the fiscal depreciation because you know what? we continue to invest in the U.S., as you know. So definitely, it's a good -- very good thing for the cash flow. As related for Germany, there are discussions on corporate tax. I know that it's a bit early to say. Of course, we'll come back to you when we have more clarity on that regard, if I may say, so...

And now we're going to take our next question and it comes from the line of Geoff Haire from UBS.

I just wanted to ask quickly about the backlog, obviously, gone up to EUR 4.9 billion. Could you just give some explanation as to what you -- what growth you've seen? And obviously, with the DIG acquisition, what do you expect that to add to the backlog when we get into 2026 when the deal is completed?

Thank you very much, Geoff. Maybe let's comment a little bit by geography what we see in the backlog and what we see in terms of business development opportunities. So Adam, do you want to comment on quickly what you have in the backlog? And what you see in terms of the business development opportunities, both, I guess, in AI and electronics and same for Emilie, maybe in the key region?

Yes, absolutely, Francois. So starting with the Americas. And Geoff, thanks for the question. So the backlog remains strong. I think one of the comments that Francois made was around the 4 growth engines that we have. And if we look at existing assets and how to leverage those, that certainly plays into our backlog. And it's very -- it's a low capital intensity growth that we see happening in the near term, which is great. So we don't have to wait for full construction on those assets to deliver on those hydrogen opportunities that we see right around the corner. So this is one that we see contributing to growth in the near term being 2026, 2027.

When we look at other opportunities, we see we have a number of projects, which are under execution today in the electronic space in North America as well as in the typical large industry space across the U.S. and a little bit in Canada. The development piece continues to be extremely robust for us in North America. And this is 1, where we're looking at not only the development on the energy transition side where we continue to follow that very, very closely, including projects like Exxon, which continue to be developing well.

We also see it in other areas on the traditional side of industrial gases around the steel sector, around refining and the like. And then certainly on the electronics space. So the backlog continues to be strong in North America and then the development activity continues to be very strong as well. So maybe I'll stop there and turn it over to Emilie.

Thank you, Francois and Adam. So in Europe, I would say the business development is still very active. So 2 things on the backlog first. We still have a good backlog the projects that are in our backlog are strong. They are with a long-term contract with solid customers, they progress as planned, and they will deliver results.

We've had 2 additional projects like you like to see as in the semicon industry in Germany and ELYgator in the Netherlands for 200-megawatt electrolyzer. So backlog, again, is strong and solid. For what is being developed right now, we continue to see a good pipeline of opportunities and active project development I would say both in energy transition as well as in other activities, core activities.

2 other sectors where we see maybe the most drive or RFNBO hydrogen. So there is still room here for good projects with strong customers, and we have solid offtakers and second, in the cement industry, cement players are continuing on their journey for decarbonization and we are here to support them, and we have active discussions with them.

So overall, I would say, momentum is still here. You've heard the recent wins and really major ones in Europe. Air Liquide continues to be in a leading position in energy transition. And overall, broadly in the industry in Europe. So we are well positioned to seize any opportunities whenever and wherever they have.

Thank you very much, Emilie. So maybe I will conclude with Asia. I know because Emilie is very positive about Europe, and she is right actually because we see quite a bit of opportunities for sure. I will conclude with Asia and close the loop on your question, Geoff.

We see, I mean, a sustained pipeline of opportunities in Asia for sure. There are 2 main drivers as far as we see currently. The first one is electronic clearly, where we see again and again, a strong pipeline of projects, which, by the way, give us the opportunity to be quite selective in terms of strategy and in terms of profitability for the project.

But as we are #1 globally and #1 in Asia I think clearly, we see this as a strong potential. And we continue to see, I mean, projects that are being developed around the decarbonization either around carbon capture or conversion of some units to limit the carbon footprint, which, by the way, close the loop to what we mentioned before about the CBAM.

A great illustration of that is the momentum that we see in China still very strong, both in terms of electronics along all the types of demand in the electronics industry, but also decarbonization, mostly conversion of some projects using steam from coal towards electricity with a very significant carbon reduction.

So extremely positive for the planet, but also for us as we are able to secure long-term contracts, there's probably more to come soon on that topic. Finally, in other countries, we see also depending on the country momentum. You had a specific question about Korea and DIG. Of course, I mean, we still need to wait for the closing to happen. And as I mentioned before, everything is well online. We have a very solid portfolio of projects. We have more than 20 projects, which are under execution within DIG. So we do expect this to contribute.

And this is not taking into account what should come, which is the next wave of major electronics investment in Korea driven mostly by AI with some of the key players, who have announced the project, but not yet launched the start of the project.

So all in all, very strong pipeline of projects in Asia. I do believe we have maybe 2 more questions before we stop. So the first one, please.

And the question comes from the line of Georgina Fraser from Goldman Sachs.

I've got 2 questions. And the first one, if we can just really zoom out, how do you explain the lack of growth in large industries over the last 4 years and what's needed to resolve that situation?

And then second question is the super strong backlog. It does seem like despite all of our fears, the energy transition is still a big part of the driver of the backlog. Can you talk about how the capital intensity of the backlog is evolving?

Thank you very much, Georgina. Good morning. Good to hear you. So the first one on the large industry, clearly, we have mixed trends in this segment. We have seen projects, and we are investing on projects, mostly driven by the energy transition. And at the same time, we have seen the declining base or declining volumes in many of the industrial locations. So those are the 2 effects. Taking into account that it's quite stabilized today in terms of a decrease in the volume in most of the region of the world.

The most impacted one has been Europe. Clearly, so if you look at the operating rate of the large industry assets in Europe, it's lower than usual for sure. And for the U.S., it has been stabilizing overall. When we talk about, I mean, the new project and the contribution of the new project, you have seen quite a bit of investment, as we discussed before. We have to take into account that -- only a small portion of the new investment in large Industry is already start-up and contributing.

Keep in mind that many of those projects, they take 3 to 4 years to build, especially the one in the energy transition, which are a little bit longer so you don't see the full benefit of the new investment in large industry, which means that all in all, I mean the new start-up and the small contribution of the new investment barely compensates the decline in the volume.

Again, this is a segment where we have clearly a reservoir of growth. The contract that we signed in the U.S. is a clear illustration of that with only a small investment, we were able to leverage our existing pipeline and existing assets, which were not fully loaded and get new sales at a very low capital intensity.

So again, what is needed is basically demand -- underlying demand -- and whenever it will happen, we are very well positioned to capture this growth with no or minimum CapEx in large industry. Regarding the backlog and the capital intensity in the backlog, I think overall, I mean the capital intensity is a little bit more difficult to read than previously for different reasons, as I explained before to some of you.

Clearly, we see that the capital intensity, which is the ratio between how much capital you invest and how much sales you get is directly impacted by the cost and the price of energy and today, we see that the price of energy is very different from one region to another one, so this means that the capital intensity of the backlog is highly dependent on the geographical split of the project within that backlog. That's one element.

The second element is that we see that in the energy transition, there are more projects where, for example, the customer is supplying the renewable electricity. That's the case for TotalEnergies in La Mède, and we basically sell to them, I mean, the hydrogen, which means that at the end of the day, the capital intensity of this part of the project is higher than classical project, which means that all in all, I mean, again, it's very difficult to predict.

It's a little bit higher probably than 2 years ago, when the energy overall was quite low in terms of price because -- on average, the energy is higher, but that's what I can say for this capital intensity, which leads me to another point, which is the fact that in the future, it's going to be more and more difficult to use the capital intensity the same way, ratio of sales versus, I mean, the investment.

What you should be looking at is the return of the capital implied -- employed and then looking at how much, I mean, profit or EBITDA is generated by the investment, which I think would be a much better way to see the contribution to the growth of the investment that we are doing. I hope that was clear, Georgina.

And then we're going to take our last question for today. And the question comes line of James Hooper from Bernstein.

I've got 2 final ones, please. Just firstly on electronics. So on the slides that you showed, it was plus 6%, excluding E&I. Can you give us some indication of when you expect E&I to get more positive? And then thinking about the component parts of big growth, how do you expect this to evolve in the coming quarters and years?

And then secondly is about China and the Asia business. The 5 -- the plenum was last week and the initial details of the 5-year plan have come out for China. How do you think that going forward, this will affect your Chinese business? And what do you think it means for demand in the rest of the region?

Thank you very much, James. For the first one, Jerome, do you want to comment on the electronics, and I will comment on China.

Yes. Thank you very much, James. You're right to underline the fact that the growth in electronics is very solid on carrier. Carrier gas very much has grown double digits and which is, again, very, very strong, and we expect this growth to continue in the years to come because that's very much reflects our leadership in this side.

For E&I, it's difficult because by definition, it's more volatile. We expect this to be more normalized during the current of the course of the next year, maybe around Q2 probably -- but again, I don't pay too much attention on this because by definition, it's a volatile or more and more volatile market.

Thank you very much, Jerome. So on China, as you mentioned, I mean, last week, there was the big meeting to say basically the course for the next few years. So a little bit too early to conclude on exactly what's going to be the contribution. But overall, what we can take already out of the discussion and some of the communication is clearly that there is a strong focus on industry and manufacturing to make sure that it stays a key pillar in the economic development of the country. At the same time, the decarbonization is still, of course, on the agenda.

So I think those are very important for us overall, given our footprint and our offering to the market. So I see that as being positive and potentially very positive for the growth opportunity in China. I think one of the effects, clearly, which is needed is to continue to build the confidence of the end market taking into account that this is one of the key factors to increase also the local spending in China, which is something which is important for the, I would say, the state of the economy.

But all in all, clearly, we can see that already as a sign for more quality growth in China, in the industry. And again, given our footprint, we will be able to seize those opportunities being in the industrial merchant overall in the electronics or in the large industry.

So thank you very much. We will conclude this session. Thanks again for all your questions. I would like to just quickly, I mean, summarize some key takeaways.

In Q3, we once then delivered continued growth. And as you have seen, a strong operational performance. All this while -- and we discussed quite a bit, successfully securing the major projects for the future. Combining our growth for growth engines with our ongoing transformation, we are with all the management team fully confident in our ability to navigate these turbulent times.

And of course, to continue to deliver both on performance targets and growth, creating value for our shareholders. Thank you very much for your attention, and we wish all of you a very good day. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good afternoon, everyone. Aude Rodriguez speaking, Head of Investor Relations. Thank you very much for attending this call today despite a very short notice. Francois Jackow and Jerome Pelletan will make a short presentation of this strategic growth acquisition in Korea. Ronnie Chalmers, Group VP overseeing the Asia Pacific region will join by phone for the Q&A session.

Let me now hand you over to Francois.

Thanks, Aude, and hello, everyone. First of all, of course, thank you for making yourself available on a short notice. The reason for this call is to share more about the strategic growth opportunity, the acquisition by Air Liquide of one of the key players in South Korea.

Indeed, earlier today, we announced the signing of a binding agreement with Macquarie for the acquisition of DIG Airgas, we will call it DIG, a leading national player in the Republic of Korea. This is a strategic growth acquisition for three main reasons. First, it will strengthen Air Liquide positioning in growth markets today and even more in the future. Second, Air Liquide's existing business in Korea and DIG are highly complementary, doubling our current size, we will build a reference player. Third, it will quickly contribute to the profitable growth of the group.

We are, of course, thrilled to welcome the 500-plus DIG employees to Air Liquide. We also look forward to continuing the long-standing and trusting relationships with many key customers and partners, hence, further develop what the existing Air Liquide teams in Korea, that I would like to thank, have successfully done.

On Slide 3, I would like to go further in detailing the rationale for our acquisition of DIG. First, due to its strong manufacturing base, including major players in semicon industry, the Korean economy is using a lot of industrial gases. The Korean industrial gas market is ranked #4 globally today and is expected to double by 2035.

Second, this acquisition is highly complementary. DIG would immediately increase our local density by adding 60 plants and more than 220 kilometers of pipeline, servicing our key customers across 10 major industry basins. I will show later how this is a perfect match for each of our existing business lines.

Third, it is a profitable acquisition and will be earnings accretive after 1 year. Our group ROCE will remain above 10%, well aligned with our advanced ambition. EUR 240 million of profitable investments are already secured with long-term contracts supporting DIG's diversified backlog made up of 19 projects.

Finally, let's make sure we understand that it is a strategic acquisition. Korea is a market we have identified for some time as one of the handful of markets that will provide significant growth in the future. It is strategic. It is also a timely acquisition. Thanks to our increased performance, our balance sheet is strong. Also, the euro-Korean won exchange rate is favorable. And finally, we are at the beginning of a new wave of industrial expansions. So DIG is the right company for us at the right time. Let's walk through a more in-depth view of what I just mentioned.

Now moving to Slide 6. As I mentioned earlier, South Korea is ranked among the top economies worldwide with the key feature that the share of manufacturing in its GDP is quite high, above 25%. This strong and diverse manufacturing economy has a presence in the traditional large industry markets of refining, chemicals and steel, having, for example, 3 mega-scale basins and 3 refineries in the world top 6. Also, its steel production per capita is one of the highest in the world.

It is also highly integrated in the production value chains. For example, in automotive manufacturing or shipbuilding, Korea has top rankings. Probably the most known leadership position of Korean manufacturing companies is in the semicon industry. Samsung and SK Hynix alone have 70% share of the memory market, for example. And LG and Samsung hold around 40% of the display market. Also, new sectors are rapidly developing such as EV batteries, electronics advanced packaging, biopharma and low-carbon energy transition solutions. The country is known for having a skilled workforce, being innovation-driven and quick to scale up.

Overall, what is making this market very attractive for us is that in most of these example I gave, the consumption of industrial gases is very high. This makes, again, Korea the fourth industrial gas market in the world. To be noticed, in particular, it is the largest carrier gas market for electronics.

Finally, another feature which is very interesting is the innovative nature of this market. South Korea R&D spending per GDP is the second highest in the world. All this explains why the Korean industrial gas market is expected to double over the next 10 years to become the second largest industrial gas market in Asia. Clearly, a geography where Air Liquide is committed and expects to capture more than its fair share of growth.

I am on Slide 8 now to talk a little bit about DIG. As a stand-alone, DIG is a leading industrial gas company, ranked #3 in Korea with over EUR 500 million of sales in 2024 and over 500 employees. DIG benefits from an impressive footprint with 60 industrial plants, 220 kilometers of pipeline networks, by the way, the most extensive in Korea. DIG has a strong historic presence in all major industrial basins as well as in many large electronic basins. It has a well-balanced and diversified portfolio consistent with Air Liquide's resilient business model. It is well known for having established deep, long-standing relationship with both global and local customers.

Let's move to Slide 9. As I mentioned, DIG has a diversified footprint and strong position in each of our business lines. In Large Industries, DIG enjoys the strong presence in air gases, the largest pipeline networks in Korea, as I mentioned, and established relationships with customers in all the main industrial complexes of Korea. DIG serves the three traditional sectors of Large Industries, refining, chemical and steel and is well positioned to capture energy transition projects.

In Electronics, which accounts today for 60% of the Korean industrial gas market, DIG has a strong footprint in carrier gases. It acts as a key supplier for both semiconductor and flat panel display customers. As such, DIG is already very well positioned to capture the next wave of growth expected in these markets, especially applications driven by AI.

DIG has a large national footprint in Industrial Merchant with a leading position in small on-sites and bulk gases and meaningful local liquid product, including argon. Finally, DIG's Healthcare supplies medical gases to hospitals across Korea and its local project and engineering team has a proven execution track record, which is very valuable in the context of new investment opportunities.

Slide 11 highlights the fact that this acquisition not only gives us a strong position in a key market, but also that it is unique in the way, it is allowing a perfect match between Air Liquide existing business and DIG.

Within Large Industries first, Air Liquide has solid hydrogen and CO operation in the Yeosu Basin and a robust Techno portfolio. But Air Liquide today has no business in air gases. Complementary is DIG's strength in air gases, an extensive pipeline network, the largest in Korea, again, and presence in all key basins.

For Electronics, Air Liquide brings technical strength and expertise, notably in carrier gases, but also for advanced materials, where we are the only industrial gas company with this type of capability. Currently, relying mainly on external technologies, DIG is a recognized actor in carrier gases and electronics specialty materials. They bring established relationships with both semiconductor and flat panel display, major Korean customers. So you see that the combination offers now a unique complete portfolio to our customers.

In Industrial Merchant, we will deploy Air Liquide's innovation and product applications to the national footprint of DIG, thus reaching a wider customer base and creating added value. Air Liquide's helium offer and specialty gases know-how will strengthen DIG's current position. And DIG has also argon available, which is very well suited to help to address the demand from other Air Liquide affiliates in Asia.

In Healthcare, Air Liquide currently is the market leader in home healthcare in Korea. This will complement DIG's medical gases supply to hospital.

And lastly, Air Liquide portfolio of technologies will certainly plug in well to the strong execution of the local DIG engineering team. DIG Engineering performs the local execution and purchases the planned technology from third parties. By the way, many from Air Liquide Engineering in the past. As such, the two teams have a long and successful history of working together. This will be highly complementary as well.

Let's move to Slide 12. And before asking Jerome to present some of the key numbers, I would like to conclude this section by reinforcing the fact that this strategic acquisition will strengthen our leadership positions. It will firmly solidify our #1 position in Asia and in electronics globally.

It will also reinforce the diversity and the density of our footprint in Korea and in Asia as well. Combining DIG's key infrastructure and strong customer relationships with Air Liquide's leading position in electronics and global expertise in areas such as blue and green hydrogen, we will build a platform for growth on markets of the future, which are clearly identified as national priorities. For example, AI fueled semiconductor development, for clean mobility of EV and hydrogen, but also energy transition via carbon capture solutions or low-carbon hydrogen, including ammonia tracking and so on.

And lastly, we will fully leverage the ecosystem of innovation in the country, both with universities and leading companies. I hope that you are now convinced about the strategic rationale and the great value creation potential of this acquisition.

I now ask Jerome to detail some of the financial numbers.

Thank you, Francois, and good afternoon, good morning, everyone. I will now highlight the key financials of this very exciting and strategic acquisition. I am now on Slide 14. As detailed by Francois, this deal is driven by the strong complementarity between DIG and Air Liquide Korea and will additionally deliver highly executable synergies, including secured growth from DIG's investment backlog.

So first, the backlog. DIG has secured growth with 19 projects protected by signed long-term contracts, representing a EUR 240 million investment. Most of these projects are efficiently concentrated in existing pipeline basins. When they materialize, they will bring more than EUR 50 million of additional EBITDA by 2030.

Second, cost synergies. As you know, Air Liquide has been very focused on overall global efficiencies. It will be no different here. In addition to cost efficiencies of procurement scale effect, leveraging business service centers and optimizing G&A, we will improve overall operational efficiencies by utilizing Air Liquide technologies and tools. This looks to secure a minimum of EUR 15 million of additional EBITDA annually by 2030.

Third, regarding growth synergies. Growth synergy brought by strong local business complementarities will be further leveraged by Air Liquide technology and the rolling out of our innovative product offering. Our technology will improve productivity in DIG air gases and will extend synergies beyond Korea. Those growth synergies are in addition to the secured growth in the backlog.

Turning to Slide 15. The proposed transaction values DIG at an enterprise value of KRW 4.6 trillion or EUR 2.85 billion. This equates to a 20.2 multiple of DIG 2024 EBITDA or 16 multiple of DIG EBITDA post-backlog. I emphasize the post backlog here because it is a secure EBITDA contribution. There will be, of course, additional benefit to the multiple down to 14.8 post-backlog when you consider cost synergies as indicated on the slide. So in fact, the multiple decreased even further when considering all the growth synergies that will be generated by this very complementary acquisition.

Leveraging a very strong balance sheet. This acquisition is supported by a structured bridge loan. It will be financed or refinanced by bond issuance and should allow Air Liquide to maintain its commitment to an A category credit rating. This acquisition will have a positive impact to group sales of around plus 2% as a large perimeter effect and will contribute to the long-term growth of the group, feeding into our advanced ambition of profitable growth.

We expect a neutral net profit impact before PPA allocation in the first year of the transaction, and the transaction will be earnings accretive, 1 year after integration. Our return on capital employed will remain above 10%, in line with our advanced objective. Of course, this transaction is subject to relevant Korean regulatory clearance and is expected to close in H1 2026.

I will now return to Francois for his concluding remarks. Francois?

Thank you, Jerome. To conclude on Slide 17, I believe you see why the DIG acquisition is a strategic acquisition for profitable growth. The fact that it positions us very well on existing end growth markets and that DIG and Air Liquide Korea are highly complementary, clearly strengthen our positions in Korea and beyond.

This combination of DIG and Air Liquide will offer long-term value creation and short-term net profit contribution. Once closed, we are confident that this strategic and complementary acquisition positioned on growth markets will contribute clearly to Air Liquide's value creation for its stakeholders.

I stop here. Thank you very much for your attention. And now we will open the call for some Q&A.

[Operator Instructions] And the first question comes from the line of Martin Roediger from Kepler Cheuvreux.

Thanks for taking my three short questions. Number one, it's about the joint venture called Green Air in which DIG Airgas has a 49% stake. What is the EBITDA of that joint venture? I ask because this is included in your EBITDA multiples.

Secondly, I'm keen to learn about the process. Did you approach Macquarie to buy that asset? Or was there a bidding process among several creditors?

And the final question is about, can you disclose what is the -- what has been the EBIT margin of DIG Airgas in 2024?

Thank you very much, Martin. So I will ask Jerome to talk about the first and the last point, and I will comment right away on the process itself.

So as I mentioned, I mean, Korea has been a market which we -- that we have identified for many years as a strategic market. We have a position in Korea today. We see, I mean, the high gas intensity of this market. We see also the potential. So our strategy has been to grow in that market, and we have been successful in securing projects in developing our activity in Large Industry and especially in Electronics for the advanced materials, where we have a leading position there.

However, due to the structure of the market, there are players which were "independent player" including DIG. So we have been looking at this for some time. And we have been proactive in testing the market. And at some point, Macquarie decided to engage into a formal bidding process for the sale of the DIG operation. So to answer your question, there has been a bidding process, and we have been successful in being selected in that process.

So Jerome, can you mention about the Green Air and EBITDA margin? I'm not sure that those are the numbers that we are disclosing. So what can you say, Jerome?

No, I can say that roughly the part of the JV Green Air, the 49% stake of EBITDA is around EUR 10 million, roughly. And as regard to EBIT margin, you're right, Francois, we are not basically disclosing that. But I would say it's very close of the average of Air Liquide Group and of course, with potential for some improvement as we have in the road map with all the synergies and efficiency that we'll be able to deliver. That's where we stand.

And the question comes from the line of Alejandro Vigil from Santander.

The first one is if you can discuss about the current size of your business in South Korea? The combination of both companies will make probably a big player there. If you can elaborate on market share, potential competition issues and potential remedies of this transaction?

And the second question is about some other M&A opportunities. Do you think this is maybe a special opportunity? Or you think there are some other markets in which you see the possibility of using your balance sheet to increase your business?

Thank you very much, Alejandro. So maybe, Ronnie, do you want to talk a little bit about our current activity and see what you can say about the position that we have and that we will have in Korea?

Thank you very much, Francois. Indeed, our own business in Korea today is roughly the same size as the business which is being acquired. But the point that Francois made is absolutely true. We are both very different. So the complementarity of the footprint is incredible.

We have this Electronic business in DIG with strong carrier gas, which Air Liquide has very little, but we have all this advanced material capability, and again, although we're similar size, for example, if you go to the Yeosu basin in the south, you can find standing within a few kilometers of each other, Air Liquide's biggest hydrogen business in Korea, a large basin. And right next-door to it, DIG's ASUs. And again, when you go to IM, there's a large bulk business to which we will bring ASU's on-site capability. So very similar size. And -- but although they are a similar size, very complementarity, a lot of complementarity. In terms of the market share, I don't think we're disclosing that today, but I'll take guidance from the rest of you.

Okay. Thank you very much, Ronnie. So as mentioned, I mean, we are doubling the size of the business. And to the point of Ronnie about the complementarity, we do not expect a specific topic regarding competition regulation. But of course, I mean, this is an independent process. So we will work with the authorities to work with them and to demonstrate what we are doing. So -- but again, we don't expect any significant topic on this matter due to the complementarity of the deal.

Regarding the M&A and the acquisition, I think you understand very well that this fits in the strategy of the group overall, which is again, if you come back to the basics of the strategy of Air Liquide, it's a growth-oriented strategy. We want to first invest in our core business, directly. And as a matter of fact, I mean, we are investing and we have a portfolio of projects, which is the highest in the history of the group. So that's really reflect our ability to secure business and to invest directly in new facilities for the group everywhere in the world. So that's number one.

Number two is and has always been acquisitions. So there are two types, basically the bolt-on acquisition that we continue to make. In the first part of the year, we did seven of those. That's mostly in IM and in home healthcare business, and we continue to do that as we see opportunity to increase the density of our business in different parts of the world.

The second type of the acquisition are more, I would say, strategic acquisition. Today, given the structure of the global market, we don't see opportunities for a major worldwide acquisition. However, there are some region of the world or some countries where you have independent players, which could be a target for acquisition. So we continue to look at that.

We have made in the history of Air Liquide, significant acquisition in the U.S., Big Three in the mid-'80s for the pipeline. But also in the U.S., of course, Airgas 10 years ago, acquisition in Japan, in Germany, different parts of the world. And always, when we see this strategic-fit, we want to seize those opportunity. This is also the reason why, I mean, it's so important for us to have the flexibility and the capability from a financial point of view to seize those opportunity.

And what we are able to do today is also the results of the increased performance of the group. You know that the leverage of the group is in the range of 33%, 34%. This acquisition will add another 10%, probably around. So we will be mid-40% in terms of gearing, giving us all the firepower to seize opportunity if we see opportunities, which are strategic opportunities, anywhere in the world.

So we will continue. Again, it's a mix of strategic view and opportunities. The good news is that we have the firepower to seize the opportunity. And at the same time, we have enough organic growth to secure growth of the group if we don't see M&A acquisition.

And the question comes from the line of Jean-Luc Romain from CIC Market Solutions.

My understanding is Macquarie, which did a refinancing of DIG Airgas last year. And I was wondering if you plan to seek to refinance this debt at better interest rates once the acquisition is closed?

Jean-Luc, thank you very much for your question. Jerome, do you want to answer this question, please?

Yes. Jean-Luc, we will, I would say, finance the acquisition overall on EV basis by issuing -- first making a finance bridge loan or refinanced by a bridge loan at the closing. And then we will refinance long term at a later stage. The bond market is quite very attractive either on a euro standpoint or either on a won basis. But not -- we will basically refinance the whole package.

And the next question comes from the line of Chetan Udeshi from JPMorgan.

I think the first question I had was just going back to your comment around the structure of the South Korean market, very export-driven. And I'm just curious if you factored in any risk associated with the growing trade wars and if any of the projects that DIG has in the backlog or existing in their footprint might be at risk of the customers suffering because of these trade wars? That's one.

Second, I'm just curious, you mentioned your revenue is broadly the same as DIG. And even though DIG is actually more exposed to on-site. So I would have thought given the CapEx intensity will be higher than yours in Korea, the revenue should be higher. So to ask question bluntly, I mean, is DIG running at a much lower return than what you do as a group and at Korean level?

And last question was on your multiple, including backlog. Can you confirm if the CapEx associated with that backlog is already spent by DIG? Or are you going to spend that CapEx? And how is that accounted for in that multiple?

Thank you very much, Chetan. I will ask Ronnie to give a little bit of color for Korea. Ronnie knows very well Korea. I mean all of us have been in Korea many, many times, but Ronnie is, I would say, the local one, so he can give some color. And then Jerome will answer the two other questions. Ronnie?

Yes. So the great thing about this acquisition for us is we know Korea very well. And we know the basins that DIG is operating in, and we know their customers. And probably one of the things that impressed us was the quality of the customers in the customer base.

So some people probably will say, Chetan, as you mentioned, that there could be some risk. But I think that the environment where Korea and the U.S. have settled their discussions at around 15% tariff rates is probably what the Korean industry was expecting and certainly what our existing and new major customers will expect. So there's a lot of confidence in the quality of DIG's customer base and probably because this is a growth-driven acquisition, the prospectives that we see and the opportunities to grow are an equally impressive quality list. So thank you for that question, Chetan. I hope it answers.

Thank you very much, Ronnie. And Chetan, I think you have really to keep in mind that this is an acquisition that we do, which is a growth acquisition, and we do that for the long term. So of course, we are working to make sure that it has a short-term contribution.

But what is driving us is really to understand, I mean, the fundamentals of the economy, not only the gas intensity, but also the leading position of key players because that's what makes a difference. So we have really, this long-term vision. We are making this acquisition to take a position for the long term because we think that it's going to create value over time. Jerome, do you want to answer the two other questions, please?

Yes, Francois. Thank you very much. Thank you, Chetan. Good to hear you. Second question, which is I would like to -- maybe to summarize on this DIG exposure to LI, meaning that is DIG running at a lower return compared to the group. I would say that it's difficult to mention that due diligence, but we have basically the same returns that we have in Air Liquide as a whole. So that's basically what we have for this. And as you say, LI is around 40% of sales for DIG, which is higher share than we have in Air Liquide Korea. So that's what I can say to you today.

Now on the multiple, your question is absolutely, I would say, very good and very accurate. Is the CapEx associated with the multiple on the EBITDA related to backlog? It's an excellent question. The answer is, yes. We have about more than EUR 50 million equivalent EBITDA in the backlog that will contribute until 2030, and this is associated to EUR 240 million CapEx associated. So we have made the calculation of the multiple based on this. So [indiscernible] impact. What I say is it's -- we have, of course, the EBITDA is made upon the same type of calculation that you are used to.

And I think one important element also is that this backlog, we do expect, I mean, more than 50% of the backlog to already contribute by 2027. So again, not only secure projects, but projects that will contribute quickly to the growth of Air Liquide in Korea.

Yes, it's an important...

And now we're going to take our next question, and it comes from the line of James Hooper from Bernstein.

I've got two more, please. The first question is about kind of the growth projections for Korea. Particularly in the on-site business where DIG, a higher business, bigger than you. We've seen, for example, this week that the Korean government is working with the pet-chem players to cut perhaps 25% of capacity given weak margins there. Is this factored into your kind of Korean growth projections where it's going to be Electronics leading the way and perhaps there might be some on-site capacity cuts?

And then the second question is a bit on these 19 projects. Could you please just give us a breakdown? Are these mostly Electronics projects or clean energy? Or can you please give us a bit of a mix, please?

Thank you very much, James. I will ask Ronnie to answer probably the two questions. The first one on the growth and how we have included, I mean, the assumption and also on some colors on the project and the backlog. Ronnie, please?

Yes. Thank you very much, Francois. So it's true that we have listened to the Korean government who is reacting to the concerns coming from the pet-chem sector in particular. I think, I mentioned earlier that DIG's portfolio is across 10 basins and the depth and the quality of the customers in those basins, gives us a lot of confidence. I mean Francois mentioned earlier that we see a long-term opportunity in the Korean economy. But even though that's true, taking into account any restructuring, I think that it's -- we're even going to benefit from the benefits of consolidation because of the strong position we have and the quality of the assets that we have in the pet-chem sector.

If we look ahead to your question about the 19 projects, it's actually quite diverse. The projects are already well underway. Much of the capital already spent. It's not mostly Electronics. It's spread across nearly all of the basins, in fact. The largest projects are indeed Electronics ones. But on average, it's pretty evenly split, more or less in line with our sales in fact.

Thank you very much, Ronnie. And as a matter of fact, we have to keep in mind also that the largest projects to come, the one that I mentioned in my introduction are probably Electronics projects on one hand, and those are not taking into account and are not secured yet because, I mean, they will materialize in the near future.

The other wave of projects, which is quite important, and we have already had some successes on this, is the energy transition to decarbonize the industry. And that's also where, I mean, the large industry position of Air Liquide and of DIG could play a key role.

And the last question for today comes from the line of Sebastian Bray from Berenberg.

I have two, please. The first is just on Air Liquide's history in South Korea because it was picked up in the press today that Air Liquide had exited large parts of its South Korean business back in 2014. And if I'm not mistaken, what was then known as Daesung Air Liquide is now part of the DIG Airgas. What was the reason for exiting in 2014? And what is the reason for coming back now? What has changed?

And my second question is just on -- it's a combination of net income accretion that's expected from this deal because I can see that, let's say, it does EUR 150 million of EBITDA in year 1. The D&A appears to be about EUR 50 million. I'm not sure of what local Korean tax rates are, but it might be something like 25%. And if I take that, it basically implies the financing to be accretive in year 1 has to be struck at about 2.6% to 2.7%, which is quite low. I'm just wondering if there's anything wrong in my calculation there?

And moreover, if this is right, and let's say, the regulator digs its heels in, are there any break fees, anything associated with [ long stop ] of acquisition that Air Liquide would have to pay if the remedial divestments get too big?

Thank you very much, Sebastian. I will ask Jerome right away to answer this question, and then I will come back to the first point about DIG and the history of Air Liquide in Korea. Jerome, please?

No, Sebastian, thank you very much for this question. So in terms of profitable net accretiveness of the project, there is absolutely no doubt. The first year, when there is an integration, it is a bit particular, we have specific cost of integration and so on. We believe that we do that in 1 year after the closing. So let's say, a few months, nearly 1 year to process this. So that will have some extra cost, that will hamper the net profit in the first year. But immediately after this integration, this will be accretive and there is absolutely no doubt on that.

Of course, based on everything we explained, the secured backlog, the cost efficiencies and everything that we put on to create, I would say, immediate value to the project. So that's basically where we stand. So accretiveness is absolutely, I would say, not only a commitment, but will be done and delivered.

All right. Thank you very much, Jerome. And let me come back a little bit to indeed the history of Air Liquide and DIG. Sebastian, you're absolutely right. I mean, DIG many years ago used to mean Daesung Industrial Gas. And we were actually one of the partner of this company at that time. But DIG now is a completely different company. One of the reasons we exited that joint venture is that we were a minority partner with limited impact on the business at that time. So for us, that was absolutely not the conditions to bring, I would say, the best of Air Liquide to the South Korean market.

Since that time, the name has remained, but the company that we have acquired or we will acquire is very different. It has grown a lot and transformed a lot. So the mix of the business, the type of the company is quite different and the business opportunities also are quite different. So it's same "name or acronym" but really a different company. And also, the fact that we have developed in parallel our business, and we can combine the two is really a great way to accelerate our position in South Korea and make us a strong player there. So that's what is behind the name DIG.

So I think we will stop here. I really would like to thank you very much for your attention today. Again, I appreciate that you took the time on a very short notice. I hope that you share really our excitement about this great opportunity. I hope also that through this call, you better understand the strategic rationale of this growth acquisition. You also clearly understand how it fits within our overall strategy. I hope also that you've got a sense that really, it's making us much stronger in key markets. And I think we have tried to illustrate, I mean, the complementarity of the two business. I think also that after this call, you clearly see the value creation short-term, but also long term for all our stakeholders.

So with this, we will end the call. I'd like to wish all of you good afternoon, a good weekend. For some of you, maybe still a little bit of a summer break. And we will be delighted to follow up with some of you during our roadshows in September with the Air Liquide management team. Thank you very much, and please take care.

Good morning, ladies and gentlemen, and welcome to the Air Liquide First Half 2025 Results Conference Call. [Operator Instructions] I will now hand you over to Air Liquide 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 Jackow and Jérôme Pelletan will present the first half 2025 performance. For the Q&A session, they will be joined by Emilie Mouren-Renouard and Adam Peters, both VP overseeing respectively, EMEA and North America. Adam is on the phone with us from the U.S. In the agenda, our next announcement is on October 28 for our third quarter revenue.

Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It's truly my pleasure to be with you today to share the highlights of Air Liquide's very strong performance in the first half of 2025. In what continues to be a turbulent environment, we have once again demonstrated our remarkable resilience. We are staying the course, focusing on optimizing what is within our control while consistently evaluating and adapting to the evolving external landscape. In this first semester, we delivered profitable growth and achieved major commercial successes, preparing for the future. Let's turn to Slide 3.

The inherent strength of our operating model and the transformation momentum supported by our teams have enabled us to deliver positive performance across all our KPIs, a remarkable achievement given the current macroeconomic and geopolitical context. Sales grew plus 2% on a comparable basis, demonstrating solid resilience and ability to continue to grow. Several key performance indicators reached record levels, reflecting our strong operating discipline and the increasingly visible contribution of our transformation momentum throughout the organization. We achieved a record Gas & Services OR margin improvement, reaching plus 130 basis points, excluding the energy pass-through effect. We delivered record high efficiencies, reaching EUR 287 million, a significant plus 23% compared to H1 2024.

Our recurring ROCE significantly improved to 11% in spite of increased investments, which is remarkable. And our ESG KPIs remained firmly on track with a few noticeable progresses this semester. For example, the start-up of 6 PPAs for an additional 1.4 terawatt hour per year of renewable energy sourcing or regarding the ECO ORIGIN offer, we have signed contracts with more than 100 hospitals to supply them with low-carbon oxygen.

Finally, our solid investment backlog stands at a new record high of EUR 4.6 billion. These are CapEx commitments for signed projects that are already under construction, directly securing our future growth. Therefore, in H1 2025, despite the macroeconomic conditions, we have successfully delivered simultaneously on growth and profitability while diligently preparing for the future. This is truly the inherent strength of Air Liquide.

Starting with performance on Slide 4. In H1 2025, we continue to execute and accelerate on the structural transformation program we launched 1 year ago. As a reminder, this ambitious program is built around 4 main initiatives, all of which are looking at structural improvements of the performance and leverage, of course, the power of data and artificial intelligence to maximize their impact. While we are rigorously executing every action within this program, let me deep dive on one specific initiative. I will focus on streamlining the organization to give you a tangible sense of the transformation, which is ongoing. Let's turn to Slide 5.

Indeed, in the first half of 2025, we have already significantly streamlined our organization. This slide provides concrete examples of actions driving structural efficiencies. First, as part of our global initiative, we have successfully removed up to 3 management layers in several parts of the organization and also removed the 4 regional hubs organization. In addition, we have reduced the number of management units across several functions, including clusters, industrial directions, home healthcare, procurement and IT. The figures on the slide truly speak for themselves, showcasing the extent of this transformation.

But beyond these global changes, we have also launched and implemented many local initiatives. We have previously shared some of these examples, and they highlight the breadth of the transformation. As an illustration, the merger of medical gas operations in Europe now under the same operational and management team as Industrial Merchant.

In France, we have completed the home healthcare restructuring. Also, our Industrial Merchant and Healthcare operations in Canada are now under direct Airgas management. In Asia, our Large Industries and Electronics operations now share the same smart innovative operations center, providing many synergies. And as you know, we've merged our Engineering & Construction and Global Markets and Technologies teams into a single engineering and technology business unit with common management and support functions.

These examples illustrate just 1 of the 4 core initiatives of our comprehensive transformation program. This program is driving profound structural changes that impact our entire organization and the way we operate. It starts to generate the ongoing efficiencies that Jérôme will discuss shortly. I want to thank our teams for their strong commitment to make this transformation a success. Now moving to Slide 6.

I would like to focus on sustainable profitable growth. Indeed, Air Liquide is and consistently remains a growth company. Keep in mind that we have been posting positive comparable sales growth for the last 19 quarters, quite an achievement as a lot happened in this time frame. If we step back, we see clearly that our growth is supported by 4 engines that we can powerfully activate depending on market context and opportunities.

First, low CapEx growth from optimized utilization of existing assets. These engines maximize the value of our existing asset base. It includes 2 key levers: pricing and volumes. This is clearly a reservoir of growth in today's environment of lower volumes, where most of the assets could be boosted with no requirement for additional CapEx.

Second, growth from investments in our core activities. This engine benefits from our leading innovation and technology capabilities and the fundamentals of our business model. While carrier gas projects in Electronics are a strong growth driver, it's important not to underestimate the growth investments we continue to make across large industries, industrial merchant and health care as we see a continuous flow of opportunities in all those segments.

Third, the energy transition. This growth engine goes beyond just low carbon hydrogen. It includes low-carbon oxygen like for the Exxon project in the U.S. and CO2 management solution. It is there to remain. Finally, M&A, our fourth growth pillar involves both bolt-on and strategic acquisitions. These 4 growth engines are supported by our strong fundamentals. We enjoy a healthy balance sheet to finance industrial and financial investments. And thanks to our diversified footprint in terms of geographies and markets, we can seize all those opportunities when they appear. Let me now illustrate 2 of these growth levers to support what I just mentioned. Let's turn to Slide 7.

Firstly, Electronics activity is a perfect illustration of our second growth engine, investments in core activities. Over the past 18 months, we've achieved major commercial successes across all regions, significantly reinforcing our #1 position in the global Electronics market. These successes represent close to EUR 1 billion of new investment secured by long-term contracts. Let's look at some key examples.

Our most recent announcement is a EUR 250 million of investment in Dresden, Germany to supply a leading semiconductor manufacturer. The state-of-the-art factory is the highest ever investment for the semicon industry in Europe, and it is also for us in Electronics in Europe. In the U.S. we have been committed an additional $50 million investment to build a new gas production plant for another leading semiconductor manufacturer. This is part of the EUR 350 million invested in the U.S. over the last 18 months, with the largest being our EUR 250 million project for Micron announced last year. In Asia, we recently announced a EUR 17 million investment to supply ultrapure carrier gases to a major semicon manufacturer in Singapore. Overall, we've secured over EUR 450 million in investments in Asia during the past 18 months.

We also recently announced something which is quite important. Which is in Korea, the start-up of the largest molybdenum plant in the world for the semicon industry. This is a key strategic investment for Air Liquide as molybdenum is emerging as a promising replacement for tungsten in advanced chip manufacturing, particularly those driving AI applications. This highlights Air Liquide's unique innovation capabilities and position in advanced materials, further enhancing our leadership in the electronic sector.

These are just a few examples, which demonstrate how our investments in core activities continue to fuel our robust growth. Turning now to Slide 8.

Let me share more on our energy transition growth engine. We recognize that the current uncertain environment presents challenges for regulators in establishing effective financing frameworks. This, in turn, can lead to customer hesitation on major investment decisions. Despite this challenging backdrop, there are opportunities. Air Liquide has been successful in developing energy transition projects with our customers. We have a targeted strategy of selecting the most promising investments in this space. And this strategy is delivering results. We have been highly successful signing major energy transition projects, representing over EUR 2 billion in investments. These projects are currently under construction and are already included in our robust backlog, securing our future growth.

For instance, the first start-up of a 200-megawatt electrolyzer in Normandy, France, is expected by the end of next year. I was there just a few days ago, and this is really an impressive first-of-its-kind facility. Other significant projects will follow like the recently confirmed FID for ELYgator 200-megawatt electrolyzer in the Netherlands. They will contribute to our growth trajectory.

In parallel, we continue to develop new very promising energy transition projects. It is an important growth pillar for Air Liquide, but of course, not the only one. 60% of our investment opportunities remain in our core activities. This clearly shows that we leverage all our strengths for sustainable growth and do not depend on any single one engine. I will conclude on Slide 9.

Air Liquide is delivering today. In H1, we have demonstrated strong resilience, delivered record high financial performance and achieved commercial successes securing future growth. Combined with these fundamentals, looking forward, we rely on 2 key elements: our ongoing transformation initiatives and our 4 growth engines. Those growth engines being the reservoir of growth of existing assets, the core investments, the energy transition and the M&As. They will allow us to seize opportunities across environments, ensuring we deliver both in the short term and in the long term.

In essence, in H1, we have demonstrated that with our ongoing transformation, Air Liquide stands as a highly resilient, more and more efficient and sustainably growing company. We are very well positioned to navigate the evolving global landscape and deliver continued value to our shareholders.

Thank you very much for your attention. I will now ask Jérôme to present the details of the H1 performance. Jérôme, please.

Thanks, Francois, and good morning, everyone. I will now review our numbers in more detail. So regarding our first half results, I am now on Page 11. Group sales have been resilient overall on a comparable basis, excluding energy pass-through and ForEx. Gas & Services sales for H1 achieved a plus 1.8% increase versus last year. The new Engineering and Technology BU is also up plus 1.8% on a comparable basis. Order intake reached EUR 642 million, up 41% versus last year, out of which third-party sales represented 38%. So overall, group sales are up plus 1.8% on a comp basis for the first half, while published sales increased by plus 2.6%, benefiting from a positive energy effect at plus 2.3%, partially offset by the negative ForEx at minus 1.5%. There was no significant scope effect during the period.

Please also note that the contribution from Argentina has significantly decreased in H1 2025 at only plus 0.4% versus 2.1% in H1 2024 and comparable growth specific to Q2 was at plus 1.9%, showing a slight but encouraging sequential increase from plus 1.7% in Q1. I am now on Page 12.

All our regions are growing. From a business line standpoint, H1 growth was mainly driven by Healthcare, Again, our diversified business line and geographical footprint complemented each other, creating an optimal balance that foster resilience, especially valuable in the current economic environment. Let us now review more specifically the activity on our main geographies in Q2 2025. I am now on Page 13.

So sales in the Americas have been strong overall, reaching plus 3% on a comp basis. Large Industry sales in the U.S. were solid and benefited from a major ramp-up in Airgases. Growth in hydrogen and Cogen was strong. In Merchant sales were driven by the continued solid pricing effect at plus 3.6%, supported by active pricing management at Airgas, which is close to 75% of the pricing impact in the Americas. On volumes, gas remains resilient overall, while hard goods remained low. Healthcare saw vigorous growth at plus 11.2% compared to last year. This was driven by robust pricing in the U.S. and strong volume as a consequence of an increased patient base in LatAm from health care.

Finally, Electronic sales were fueled by solid volume on carrier gases and Advanced Materials, yet they did not fully offset the decrease in sales of equipment and installation compared to a record level last year. Sales in EMEA are resilient, supported by solid growth in Healthcare. In Large Industry, customer demand remained low, particularly in the chemicals and steel sector and soft in oil and gas, mainly in France and the Benelux. In Merchant, pricing stayed solid at plus 2.5%, driven by favorable indexation in bulk and sustained high pricing in packaged gases. While volume remains soft, they are still growing, excluding the last year divestitures of our operations in 12 African countries.

Finally, Healthcare delivered robust growth at plus 3%, mainly driven by dynamic home health care activity. Activity in Asia was soft in Q2 with growth driven mainly by Electronics and Large Industry. In Large Industries, sales growth was supported by the start-up of the takeover of the unit of Wanhua in China that we announced last year and volumes ramp-up in Korea, partly offset by turnaround. Merchant sales were generally soft, in line with our expectations, while pricing remained low because of neutral inflation, it showed improvement compared to Q1. On China, China sales were robust, supported by bolt-on acquisition in packaged gases and this despite challenges in the helium market. The rest of Asia remained globally stable.

Electronics finally, sales again saw a solid increase driven by double-digit growth in carrier gases from start-up contribution. It was partly offset by lower sales on Equipment & Installation and Advanced Materials, the latter impacting by the strong comparable basis last year.

I will now quickly comment on our Q2 activity by business line. I'm now on Page 14. In Merchant, we continue to see solid pricing with plus 2.7% in Q2, slightly higher than Q1. Overall, gas volume remained flat, while hard goods were down in the U.S., in line again with our expectations. In Large Industry, we saw growing sales driven by the U.S. and China.

On Page 15, next, we move to Electronics. With 7 start-up in H1, Carrier gases sales continued to grow this quarter, but could not offset decreasing sales in equipment and installation after a record level last year and low Advanced and Specialty Materials sales. Finally, Healthcare is the growth driver this quarter with sustained and resilient growth in both medical gases and from SK. Moving now to our margin on Page 16.

As Francois highlighted, our transformation initiatives are clearly paying off. Group operating margin in H1 improved by a solid plus 100 basis points. And for Gas & Services, the increase is even more significant at plus 130 basis points. Of course, this is excluding the energy pass-through effect. Purchase have seen only a limited increase following energy cost increase, mainly natural gas. Personnel costs are flat despite the inflationary environment, thanks to the benefits of our organizational simplification plans. Depreciation is slightly trending upwards, reflecting the start-up of our new production units.

On Page 17 now, the ongoing margin improvement is supported by 3 pillars of our structured execution plan. First, IM pricing remains solid with plus 30% increase since January 2022 and a sequential increase in Q2 2021 versus Q1. Secondly, we delivered EUR 287 million of efficiency in H1, an increase of plus 23% compared to H1 2024. This improvement reflects the acceleration of our structural transformation initiative effect, as Francois spoke in his opening section. Lastly, we continue to pursue active portfolio management, which was 7 acquisitions in the first half of 2025 and executed 3 divestitures with a continued focus on strategic profitable and margin accretive opportunities.

Let us now review the bottom lines of the P&L. I'm now on Page 18. Nonrecurring operating income and expense accounted for EUR 47 million, mainly due to the restructuring costs linked to our transformation plan. Net financial cost, sorry, decreased by minus EUR 14 million with lower net cost of debt, mainly due to reduced factoring costs. The average cost of debt decreased slightly to 3.3%. Our effective tax rate stands at 25.1%, an increase compared to last year. This rise is primarily due to an exceptional one-off tax surcharge in France in 2025. So net profit growth is at plus 8%, excluding FX. And recurring net profit excluding FX is up significantly at plus 10.3%.

On Page 19 now, our robust cash flow generation allowed us to finance a rising CapEx of EUR 1.7 billion. Our net debt is at EUR 9.8 billion as of June 2025, marking a EUR 635 million increase from December 2024 following the payment of EUR 2 billion in dividends in May. Our gearing is stable at around 33.5% adjusted, of course, for the dividend payment seasonality effect.

I'm now on Page 20. As you can see, recurring return on capital employed continues to rise now at 11%, while we continue to grow our investment. This is well above our advanced objective and another clear sign of the improvement of the group performance in the last years.

Moving now to Page 21. We will now review our main investment KPI. Firstly, as of June 2025, our 12-month portfolio investment opportunities remained strong at EUR 4.1 billion. This diverse portfolio includes many projects with over 40% dedicated to energy transition, mainly in Europe and in the U.S. Additionally, about 1/3 of these opportunities are in electronic business with projects across Asia, U.S. and Europe. Secondly, on investment decision reached a record EUR 2.3 billion for the first semester. And last, the investment backlog reached a new record of EUR 4.6 billion. Current investments are diversified, spread across approximately 80 projects across all geographies and 1/3 of this investment in progress corresponds to projects in the Electronics business.

As a reminder, and as Francois mentioned, this backlog is only made of growth projects. In H1, we achieved EUR 1.157 million (sic) [ EUR 157 million ] of sales contribution from start-up and ramp-up. For 2025, we are confident that the contribution from our start-up and ramp-up of project will deliver more than EUR 310 million.

On Page 22, as Francois mentioned in his introduction, we confirm our guidance for 2025 as well as our plus 460 basis point margin improvement outlook until the end of 2026 for the 5-year period.

Thank you very much for your attention. I now hand over to Francois.

Thank you very much, Jérôme. So I think we are going to take the Q&A now.

[Operator Instructions] And now we're going to take our first question, and it comes from the line of Laurent Favre from BNP Paribas.

The first one is regarding leverage and gearing. I think you mentioned that you've got gearing adjusted at 33.5%. I think it's one of the lowest levels we've seen since the acquisition of Airgas. I was wondering if you could talk about the plans for, I guess, leverage. How do you -- where would you see ideal leverage for you? And in terms of M&A as well, if you can talk about how you would assess the value creation merits from a financial standpoint on acquisitions?

The second question maybe for Emilie is around the ELYgator project. You've got 60% of the capacity with long-term commitments. Can you tell us what the plan is for the remaining 40% of the capacity? Is it to go after merchant opportunities? Or would you hope to sign further long-term commitments before the start-up?

Thank you very much, Laurent. Thank you for your two questions. I would ask Jérôme to answer the first one and Emilie indeed to talk about this beautiful project ELYgator. All right. Jérôme.

Yes. Thank you very much, Laurent. Good to talk to you. You said it, we have a gearing, which is quite stable, 33% in H1, and our balance sheet is quite strong coming from a long story. So we are clearly at the opportunity to save a big part of record of investment. And you know it's something that we said every time. We are very much, I would say, positioning to continue to grow and to take additional investment opportunities. And we have some and you know what we see both in terms of portfolio opportunities, which is above EUR 4 billion. And that we have clearly some opportunities that we continue to say and this is translated into investment decision.

So we will continue to favor our industrial project. Of course, we also -- and in a sense, we can also go to some acquisition at some point. But basically, our opportunity is very to go to direct opportunities of investment. Then after that, if we would not be in this position, and it's something that we discussed a lot, if we will not be in a position to, I would say, allocate this cash flow to investment and long-term growth opportunity, then we would return more to the shareholders, but we believe today, we are not in that situation. So that's where we are.

Thank you very much, Jérôme. So next question, Emilie, please?

Sure. So on ELYgator, Air Liquide has taken a major step early July as regard to the ELYgator project. We've taken FID to invest more than EUR 500 million and launch the construction of ELYgator in the Netherlands. So maybe as a reminder, it's a 200-megawatt electrolyzer dual technology that we will build, own and operate with renewable power already secured. It will be located in the Port of Rotterdam and will be connected to our pipeline network. So indeed, it will supply TotalEnergies refinery with renewable and low-carbon hydrogen through a long-term contract, but it will also supply hydrogen for the industry in the area.

As I said, this electrolyzer is connected to our pipeline network, offering us several opportunities for other offtakers. We will also develop in the area mobility transport market, especially heavy-duty mobility. Air Liquide will leverage our leading electrolyzer technology manufactured by our joint venture with Siemens Energy for this project.

So overall, I think this milestone really demonstrates our ability to develop solid business models in the field of energy transition and more particularly low carbon and renewable hydrogen and leverage our differentiated technology innovation as well as our strong relationship with our strategic customers.

Thank you very much, Emilie. And Laurent, you know that this investment and this is the same for the Normand'Hy one of the very strong points is that we follow our strategy, which is to base this on industrial demand to get the economies of scale. And as mentioned by Emilie, and this is the case in northern part of Europe, but also in the same valet to connect that to the pipeline system. So that gives us a lot of flexibility to find different customers to meet different needs and also to use, I mean, this very good basis in terms of economies of scale to supply mobility project when they arise.

So that's the strategy for ELYgator. Same thing for Normand'Hy, which is clearly demonstrating our leadership, hydrogen for the industry, but also for the mobility, the big one today being, of course, for the industry. Thank you very much. We take the next question please.

And the question comes from the line of John Campbell from Bank of America.

Two questions, if I can. So regarding your significant Electronics investment in Dresden, I wanted to know if you anticipate if this investment will entirely fulfill the anticipated needs of projects in that area? Or should we perhaps keep an eye out for other gas contracts developments in Germany? And perhaps could you clarify for me how this investment decision has been recorded in the context of first half results? Is it in the backlog as of the end of June?

My second question relates to U.S. blue hydrogen. We now have 11th hour clarity over the 45V tax credits. I wanted to ask if you have noticed any impetus among potential developers now to get their projects over the line. To give you an example, I noticed that Chevron submitted tax abatement requests to Texas authorities shortly after the Senate approved the tax bill. Do you have a line of sight potentially on that project?

Thank you very much, John. So I'll ask Emilie to talk about the major project. And Adam to comment on the U.S. and what we have seen following also the One Big Beautiful Build because I think there's a lot to take away and quite positive out of this, and Adam will speak more about that. So Emilie, please.

Sure. So on this project, Air Liquide has been awarded a long-term contract to build, own and operate new state-of-the-art industrial gas production units in the heart of what is called the silicon factory in Dresden in Germany. So we will supply large volumes of high-purity gases to one of our major customers and one of the leading semiconductor manufacturers in the world. It's a bit more than EUR 250 million of investments, and it is the highest ever investment for Liquide in Electronics in Europe. So this will really significantly enhance our #1 position in global Electronics market and in Europe. So the market in Europe is forecasted to grow with demand for semiconductor products, but also driven by sovereignty purposes and resilience of semiconductor supply chain.

In this region, in particular, we're also benefiting from decades of established partnerships with customers and also from highly skilled workforce. So really, our idea is to continue to expand and benefit from this growth in the market in this region, in particular, but overall in Europe in Electronics.

So to conclude, this project is obviously well aligned with our strategy and one of our 4 growth engines, strategic investments in our core activities. Air Liquide is already the leading industrial gas supplier to the semiconductor industry in Europe, and this will reinforce our #1 position in Europe, which will enable us to continue to grow in this market with higher demand.

Thank you very much, Emilie. And if you have been to Dresden, you see clearly, I mean, the footprint that we have with multiple units. We have also pipeline connections going to different customers. So we know that there is -- there are several other projects in the area. And we are, I think, very well positioned to capture also this growth in what is the really heartland of Europe for semicon industry. Emilie, you had also a question on the backlog...

Sure. In terms of backlog, we have in our backlog today for this project, EUR 124 million already accounted for in the backlog.

Thank you very much. Adam, do you want to speak about what we see in the U.S. following some of the recent legislative events?

Yes, absolutely, Francois. Thanks a lot for the question. I'd like to maybe step back on the One Big Beautiful Bill and talk about the impact to Air Liquide, which I think is very positive actually. And then come specifically to your question around 45V and what we can expect there. If I look at the beginning of this year and the administration change and the like, I think there were sort of 3 areas of uncertainty that we were facing in the U.S. One of them was around the reconciliation bill or what we call the Big Beautiful Bill for the Trump administration. The other one was around interest rates and the third one was around tariff uncertainty.

I think on July 4, when the One Big Beautiful Bill was passed into law, this took away one major uncertainty factor about how things are going to progress and opening up the doorway for final investment decisions from customers and certainly from us. So if I look at the bill itself and I look at what passed into law with that bill and coming specifically to your question around 45V, 45V was passed in such a way that basically it allows companies to have until January 1, 2028, to start construction on projects, and this really reflects projects which will benefit from low carbon hydrogen, including blue hydrogen, as you mentioned. So it gives a runway of 2.5 years to develop those projects and start construction in order to make those work.

So to your point specifically, I think this is going to open the doorway for a number of projects to move forward in the low-carbon space to allow for the development of an ecosystem for hydrogen in the U.S. So this is, I think, very exciting.

Specifically to the Chevron project, I don't know if there's anything in particular to talk about on that one there. This is something that we have followed extremely closely over the past 2 years in terms of developments in blue hydrogen. There have been many, many projects that have been on the table in terms of development and the like. I imagine now with the passage of 45V in terms of clarity, we'll have more and more projects come together. Chevron is certainly a company that we have worked with in the past and continue to work with. So I won't comment specifically on that, but I think that we'll start to see more projects develop and come to fruition from serious players in the market, which I think is great.

A couple of other points to mention on One Big Beautiful Bill. One is around 45Q. So this is the carbon tax credit that comes for carbon sequestration and utilization. This actually improved under One Big Beautiful Bill. So now carbon utilization has the same tax credit as carbon sequestration at $85 per metric ton. So I think this was an advantage also for energy transition. Another one for Air Liquide is around the corporate tax rate. So there was talk of a corporate tax rate basically for foreign companies with business enterprises in the U.S., and this was removed from the bill. So while this was a little bit of a concern point during the negotiation of the bill. I think it's a very positive outcome at the end of the day.

The final one I'll talk to is around the CHIPS Act. You may know in the U.S., the CHIPS Act for reshoring of the semiconductor industry was in place for projects that started by the end of 2026. It was previously an investment tax credit of 25%. That's been raised to 35%. And this also, I think, bolsters the investment opportunities that we see from large clients that are -- that we partner very closely with in the U.S. market. So there's a number of other provisions. I'll stop there. But altogether, I think this bodes very, very well for the investment landscape in front of us in the U.S.

Thank you very much, Adam. And thank you, John. Let's move to the next question please.

And the question comes from the line of Jean-Luc Romain from CIC Market Solutions.

One refers to -- back to the projects, hydrogen projects in the Netherlands. I think the Dutch government announced some helps for some projects last week before you announced ELYgator. How much of the EUR 500 million CapEx could be covered by European Union subventions? That's the first question. Second question is, could you update us on your carbon capture projects for cement plants and like EQ and other ones?

Jean-Luc, thank you very much for those questions on the energy transition in Europe. Emilie, do you want to give us some light on this?

Sure. So thank you for the question. Indeed, we received several fundings for ELYgator from -- coming from Europe and also coming from the Dutch government more recently. Overall, if you can have an order of magnitude for these projects, electrolyzers and more energy transition projects, we are about between 30% and 50% of CapEx subsidies that we typically receive combination from Europe and governments.

On the cement project, so overall, I would say, in the cement activity, our customers are still very active in terms of development. I would say -- of course, there are still uncertainty in the regulation, but cement players are very active to continue on their journey to decarbonize their plants. We are actively working with them. Now it depends before taking FID depends on ETS price. It depends on some other mechanisms such as carbon contract for difference, for instance, and it depends on the viability of the whole CO2 chain from the capture unit to the sink.

But overall, I would say, still a good momentum on cement projects. They still benefit from a lot of funding as well from Europe, and we accompany them along their journey to develop their projects.

And you know very well that for those projects, the infrastructure is very important, and there has been recently quite a bit of progress in that. I mean, the ratification of the London protocol to be able to export CO2 from one country to another one in several European countries, for example, but also the availability of some sink and expansion like the Northern Light announcement. So we see clearly things which are moving ahead in this space with a good momentum from the customer side, as mentioned by Emilie. So thank you very much. We move to the next question, please.

And the question comes from the line of Thomas Wrigglesworth from Morgan Stanley.

First question, if I may. Just in terms of the kind of the near-term dynamics, possibly more as a read for other industries. Could you talk a little bit about how your comparable growth is progressing as we exit 2Q? Specifically, do you think that you can kind of repeat the rate of comparable growth that we're seeing in the first half and the second half? And I'm particularly interested if you're seeing offsets like certain areas or regions that are cooling, you're able to offset that with growth in other areas above and beyond the kind of the new projects that you've called out?

Okay. Thank you very much, Tom. So I think given the context, we expect the probably the same top line momentum for the rest of the year. This means that the sales will remain resilient in all the geographies with overall positive sales growth in all the business lines of Air Liquide. We could see some upsides, and we hear some positive things from customers. But I think in the current context, given all the uncertainties, we have to be cautious about that. It's true that we start to see some momentum in Electronics. As mentioned by Adam, we start to see also some momentum, maybe some effect of the new policy in the U.S. But again, I would really would prefer, and that's what we are doing internally, stay cautious and probably confirm the trajectory that we have seen so far.

This being said, we also expect to see the same momentum in terms of project development with a very strong portfolio of projects in Electronics, in the energy transition, but also more in, I would say, the classical large industry, especially in the U.S. So all those are, again, positive signs for the midterm.

This being said, maybe just to conclude, for us, for Air Liquide, for the management team and the teams, we will continue to really focus on what we can control. We will, of course, also leverage the transformation initiative to continue to deliver higher profitability. And for sure, we remain agile and seize the opportunities along our 4 growth engines.

And Francois, just a follow-up to that, please. Obviously, the margins running ahead of your guidance. So will you revisit what your targets are out through '26 at some point? Or and could you grade the outperformance that we've seen versus the -- on a run rate basis, can that continue to accelerate through the next couple of years?

Well, Tom, I think it's quite early to update, I mean, the guidance that we gave. What I can say is that based on the results, based also on the momentum, the real momentum of our transformation program, we feel extremely confident that we will deliver our commitment for 200 basis point improvement for '25 and '26. So that's where we are today. We are extremely focused on the execution, but things are going well. It's a challenge. It's not easy every day, but we are making very significant progress. And since you see more and more the structural transformation of the group are contributing, I'm confident that looking forward, this will continue. Next question, please.

And now we're going to take a question from James Hooper from Bernstein.

My first question is a little bit about the transformation initiatives. You said in the release that you set up a group industrial department. Can you give us a little bit more detail about what this group is intending to do? And do you see the kind of central costs being, therefore, higher from here on for delivering more efficiencies? And then secondly, just to follow up on Tom's question. Can we go a little bit more detail into Electronics and the outlook for kind of carrier gases, advanced materials, equipment installations and how you see that progressing around the regions, please?

All right. Thank you very much, James, for those questions. I will talk about the transformation and maybe Jérôme and also Adam will talk a little bit about the electronic outlook overall. As you mentioned, I mean, that was an important step where before we had 5 industrial directions for every -- for each business line, the IM, the Large Industry, the Electronics and so on with quite a bit of overlap, but to some extent, also probably some silos. So we have put all that together. So there is a little bit of cost to bring that all together, taking into account that we are absolutely convinced that as an organization, this will be more efficient that will leverage all the skills of the group and of course, offer opportunities for people to contribute to different parts of the business.

So what are we doing there? We have already started to identify, I would say, the best practice within Air Liquide, but also with the industry in general. So the benchmarking part has been extremely important, make sure that, for example, we take the best practice of the electronic business in terms of reliability, and we use that in other part of the business. So we continue and we have set up a whole system on that. We have also with that, I mean, defined a very strong set of KPIs and management system to make sure that we manage the performance of our industrial operation much more closely. And we give also the tools of everybody in the company to understand where they are and how they can improve, making also available best practice and standard practice for them.

What we have done, which is extremely powerful is that we have identified a limited set of initiatives where we want to enforce that. We used to have a culture maybe where it was a little bit menu because we are -- we were a very decentralized organization. So people can pick and choose basically what they wanted to do in terms of operation. We are much more streamlined and, I would say, clear on what are the expectation, and we are much more focused with centralized team who can implement the solution, for example, for the most advanced process control and data management across the group. So we have kind of a squat team, which is working on that, working with the operation and implementing those initiatives across the group. We have done more than 400 site visits and action plan. So that's ongoing. We start to see the benefit already, but that's ongoing.

The last thing that I would like to mention, of course, is the fact that with this unified industrial direction, we can leverage even more the use of data that we have been developing for the past 10 years. We have been using AI for many of our models. We have close to 10,000 models within our operations, which are using AI. But the next revolution is really to leverage the Gen AI capabilities. Many people are talking about that. Very few are actually doing it in a sense where it's adding value. That's what we are working on, and that's where this industrial direction give us, I mean, the visibility to focus on what is the most relevant, what is going to contribute the most and to go the fastest on that. So again, we have put the foundation. It's the beginning. We start to see already progress and contribution from the industrial direction, but definitely more to come.

Now let's move to the Electronics. Adam, maybe you want to give us a little bit, I mean, what you see from the U.S. but also global customers and Jérôme will complement on this.

Absolutely, Francois. James, thanks a lot for the question. So we talked about Electronics. One of the slides that you saw in the deck was around our position in Electronics being #1 globally and really enhancing that position with the major investments that we see in each of the geographies around the world. When we look at the market dynamics and you think of the reshoring activity that's taking place in the U.S. right now, and that will be enhanced further by the CHIPS Act, what that's allowing for is next-generation advanced fabs to be built in the U.S. in particular, which will utilize many molecules that Air Liquide produces in terms of advanced materials, but also leverage carrier gases for infrastructure build-out and basically being that core anchor point for each of those investments. And I would say that we're in a very strong position and have leveraged that strong position in terms of landing new agreements, not only in the U.S., but also in Europe with some major wins that Emilie mentioned earlier as well as in Asia.

And I believe that when you look back at the last -- at the first half of this year, our growth in those 2 areas in Advanced Materials and in carrier gases in the U.S., in particular, were a solid double-digit percent growth over previous year. The downside that offset that was on the E&I piece. And I don't look at that as a negative. I look at last year as a very solid year for Equipment & Installation activity. It was actually a record year for us in terms of Equipment & Installation, really building on the fact that many customers were starting to build out new fabs in the U.S. market and enabling us to sell equipment and help them with turnkey solutions for that. But now we're on the other side of that and basically starting to build out the more material side of the business as volumes begin and will take off in the years to come.

So the prospect is still very strong for Electronics, and it still remains a very good growth driver for us. I would also say that, as I mentioned earlier, with the CHIPS Act enhancement for a 35% investment tax credit for our customers by the end of 2026, it's a nice enhancement for them to increase their investment in the U.S. market and reshore activity further here, which creates even more opportunity for us. Maybe I'll stop there and turn it over to Jérôme.

Yes. Thank you very much, Adam. And Jérôme, briefly because I see that we have a few more questions...

Of course. Let's go quick. But basically, James, thank you for your question. In terms of Electronics, the underlying demand remains strong and whatever tariff or whatever we talk about that. So long-term basis, there is absolutely no discussion that this will continue to grow. As we have to specifically 2025, we believe today that in the second part of the year, we have the impact of all the good projects we signed and the ramp-up of start-up and ramp-up of carrier gases. It's more than 50% of our mix in Electronics. So this is going well.

We should have also an accelerating Advanced Materials compared to the months before. We will have still to compare to a high base on Equipment & Installation. We have a very significant base that we have to compare. But overall, we should grow in H2 overall in Electronics.

Thank you, very much. Again, overall, we feel very confident about this market where we are #1. And when you look at the trajectory, all the forecast of the industry show that the segment will double by 2030. So it's a growth engine for the group for sure. I think we have maybe time for at least one question. We see if we can do more. Geoff?

Just two quick questions. One was that -- thank you very much for the details on the industrial transformation program that you gave. Those details and that program, is that going to last just up until the end of '26? Or is there more opportunity around what you're doing into '27 and beyond? Or will there be new programs that you will look at? And then the second question is just, obviously, you had an EBIT loss in the non-gases and services business of EUR 190 million. That's obviously impacted by the disposals that you made in engineering. Is that the sort of run rate on the EBIT loss of the non-gases and services business that we should expect as we go through into the second half and beyond? Or were there one-offs in that, that we need to be aware of?

Geoff, thank you very much for your two questions. So Jérôme will answer the second part. For the first one, definitely, this is just the beginning. So we are setting up the foundation. Today, we have a lot of other initiatives that we could launch and more will come as we see also development in AI and Gen AI. So I think really, we are opening a new era in terms of industrial performance. So there's more to come beyond 2026 for sure. Jérôme, do you have a comment on the second question?

Yes, not so clear about the question. But basically, we do not have any write-off related to engineering and construction. What we have specifically for second -- for the nonrecurring item for H1 was really the restructuring costs that we put in exceptional costs. We cannot give you more detail on that. Of course, as the second part of the year, we might come back as this is going to fruition. But so far, that's where we are.

Thank you very much. So we'll take 2 more questions, but we try to be very brief.

And the next question comes from the line of Georgina Fraser from Goldman Sachs.

Two quick questions. One of them is, I'd love Air Liquide's read of the inflationary environment. So if you could give us your thoughts on how pricing should develop in each of the regions in the second half of the year? And then my second question was, I was surprised that Americas was the strongest region in the first half. Could you just explain what was driving that? So I've got a better grip.

Thank you very much, Georgina, thank you for your two questions. For the inflation, we do expect things to continue on the same trend overall. We still see a very strong momentum in North America, especially, and this is a mix of, of course, I mean, the environment, but I mean the skills of our teams, not only to follow but to also the inflation, but also to provide the value-added services and innovation to our team. In Europe, I mean, we resist very well, and we continue to pass positive pricing.

There is one area in the world where it's more challenging. It's China today for some part of the business, especially on the bulk, the helium, of course, but it's a very specific case, where we are basically price neutral for this. But we have a very strong growth for the IM, it's high single-digit growth in China. But the pricing is probably the weakest for the group in China. For the rest, remains solid and will remain solid.

For the U.S. and the contribution of the U.S., I think it's different things. The overall very strong resilience, of course, of the model. We have seen good development in terms of pricing, as I mentioned. But also, we have to recognize the contribution of the health care activity being extremely solid. At the same time, very solid in the U.S., in North America for med gas for the hospital. With a very strong growth there, but also the home care activity, mostly in LatAm, which was extremely strong and robust in terms of growth. Keep in mind also that we had some start-up effect in the large industry in the U.S., especially that contributed to that.

Once again, I think we have to keep an eye on the U.S. because we know that the U.S. economy is one which is very reactive. Again, it's too early to give a direction, but we start to see at least on the project, I mean, some things which are happening. And given our footprint overall, you know very well that we will be able to seize any opportunity for growth in the U.S.

I think we have to stop here now. So this will conclude this session. Thank you very much for all your questions.

To summarize, we delivered again a strong performance in the first half while being able to prepare the future growth through successful development on major projects as we have just discussed. In essence, with our strong ongoing transformation, Air Liquide stands as a highly resilient, increasingly efficient and sustainably growing company. We are very well positioned to navigate the evolving global landscape and deliver continued value to our shareholders.

Thank you very much. For the one who are going to take some vacation, I wish you a very good summer break, and thank you again for your attention. Have a good day.

This concludes today's conference call. Thank you for participating. You may now all disconnect.