Air Liquide Aktie

Good day, everyone. And a warm welcome to our Capital Markets Day. Our full leadership team will unveil beyond our new strategic plan, and they will answer your questions. Let me now hand over to Joe, who will assist you through the presentation. Joe?

Thanks, Aude, and welcome, everyone. We will begin with a 1.5-hour presentation, then following a 5-minute break, management will host a Q&A session. Additionally starting now, you may write a question using the button at the top right of your screen. To dive right into the strategy and set direction for our plan, I'll turn the stage over to Francois.

Thank you, Joe. Good day, everyone, and welcome to Air Liquide's 2026 Capital Markets Day. Thanks to all of you who are attending today. It's a real pleasure to be here with the management team of Air Liquide. This is an important moment. I know this CMD is something that you have been looking for. Many of you know us very well, so I am convinced that you will fully appreciate the step change we are introducing today. 4 years ago, I was here with the team sharing our strategic plan ADVANCE.

Since then, in a rapidly changing and challenging global environment, Air Liquide has demonstrated extraordinary resilience and agility, outperforming the ADVANCE objectives in terms of growth, profitability and extra financial impact. We haven't just navigated market shifts. We have used their momentum to transform the group. Today, we stand as stronger, more profitable and more agile, fully positioned to serve better our customers and accelerate our performance and maximize lasting shareholder value through 2030.

Air Liquide is a proven earnings compounder. Over the past 30 years and through every economic cycle, we have averaged over 7% annual operating income growth, and that growth has accelerated over the last 4 years. This long-term track record and the profound transformation initiative with advance give us the springboard for our next strategic phase, reach a new frontier in lasting value creation under our strategic plan BEYOND. We have built and refined an exceptional business model. Since the Airgas acquisition, we have accelerated cash generation by over 10% per year, while cutting our leverage in half, reducing net debt to EBITDA from 3.3x down to 1.5x. This disciplined financial stewardship now gives us financial balance sheet strength and capital allocation firepower.

On these strong foundations, we have established an outstanding platform for future profitable growth. Air Liquide occupies a truly unique competitive position. We pair an extensive global footprint with deep local market integration, ensuring close customer proximity and engagement. As a technology pioneer, we continue to lead innovation across our industry. Supported by an ongoing group transformation program and a renewed performance-driven culture, we are moving beyond.

In this next phase, our focus is simple, maximizing lasting value creation. Long-term performance is in our DNA and will remain. For BEYOND, we are taking our momentum further, pursuing sustained growth, accelerating profitability and driving superior total shareholder return, all while fulfilling our commitment as a responsible corporate actor. In this volatile world with conflicted trends, it is essential to stay the course. BEYOND is built to deliver, built to win. Success means first, profitable growth, delivering profitable growth, measured by a compound annual EPS growth rate of 10%. Second, delivering lasting value, measured by keeping the return on capital employed above 11% in 2030, even as we aggressively invest much more than before.

And third, of course, making a positive impact by continuing our CO2 reduction trajectory. These 3 objectives are more than just targets. They are our North Star, driving every strategic decision and success through 2030 and beyond. They matter to us. And listening to you, I know they matter to many of you, too. Let's go deeper. To start with our EPS objective. I will walk you through how we will accelerate bottom line value creation. Under the BEYOND plan, we are combining 3 primary financial levers to drive consistent EPS growth.

First, sales growth, growing at 5% per year on average, which means outperforming industrial production by 2x to 3x. Second, margin improvement. We have a clear line of sight to deliver 400 to 600 basis points of OIR margin expansion over the next 5 years. Third lever, capital allocation optimization, deploying our strong cash generation into high-return growth investments, accretive M&A, solid dividends and for the first time, we also include another tool in our toolbox to deliver value, a significant share repurchase program.

Again, setting an objective of double-digit growth EPS over the period is a clear step change. Keep in mind that we average 7% per year over the past 20 years. This is our commitment and responsibility to leverage in a flexible and determined way the 3 levers of growth, margin improvement and capital allocation to ensure we stretch ourselves to cope with many opportunities and challenges. And at the end, we deliver lasting value.

Let's break down each of these levers to grow EPS. How we will expand our business? We see 3 distinct growth engines, which Francois, Marcelo and others will detail later. Let me give you an overview. First, with sharper strategic focus, we will extract greater value from our existing base, serving millions of customers across all geographies through diverse product lines and distribution networks, we see significant room for further optimization.

By leveraging big data and AI, advancing gas application, driving network densification and deploying continuous innovation, we will maximize asset utilization, optimize our cost structure and capture accretive pricing. Next, we see substantial opportunities in key growth markets, several of which we will dive into shortly. In a few minutes, you will also see how our innovation leadership across core and high-growth markets will make a difference.

Lastly, when available, we will seize large strategic acquisitions, building on major successes like DIG in Korea, a strong growing electronics market while continuing our track record of accretive bolt-on acquisition. Adam, Armelle and Ronnie later will explain how we execute this strategy in various geographies. As I mentioned, innovation is key to our differentiation and ongoing growth. Armelle will explain it later. But what I would like you to remember is that by pioneering first of its kind innovations, we are expanding our addressable markets and continually reinforcing our long-term competitive moat.

We are confident that our continued strategic investments in innovation will sharpen our commercial edge by meeting the needs of our customers and drive top line momentum. But this isn't just about revenue. Innovation is equally crucial in expanding our profitability and expanding our margins. At Air Liquide, performance is in our DNA and beyond is about stepping up our margin expansion. This is our second core lever to drive EPS growth. Our global group transformation program launched in 2024 is the primary engine behind this performance step change. Matthieu and David will go into more detail, but let me share already some concrete examples.

First, organization efficiency. Against all odds, we have already reduced overall headcount by 6%, approximately 4,000 positions. Also, shared services migration. In 18 months alone, we have shifted 30% of group processes into global business service centers in optimized location. Also, resource efficiency. We cut specific energy consumption by another 3% since 2024. And finally, AI deployment. Over 1/3 of critical group processes are already enhanced by AI.

We are already in motion and beyond will accelerate even further this momentum across 4 operational pillars until 2030. First, continuous streamlining of our organization structure everywhere in the world. Second, leveraging our global scale, for example, in procurement. Third, unburdening local teams so that they can focus on customer satisfaction and operational excellence. And lastly, deploying AI as an enterprise platform to maximize structural efficiency.

With these pillars, we target to further improve the margin by 400 to 600 basis points for the period. This is quite ambitious. Our third lever to our EPS growth target of 10% is capital allocation. Our approach to maximize lasting value is clear, direct and disciplined, backed by a renewed and optimized capital allocation policy. Thanks to improved profitability over the past few years, Air Liquide has now the balance sheet strength to aggressively fund high-return growth while stepping up shareholder returns.

Over the time line of this plan, we will deploy more than EUR 40 billion of capital in industrial investments, of course, more than in the previous period, while maintaining our robust dividend payout ratio around 60%. At the same time, we remain fully agile in accelerating value-accretive bolt-on and strategic acquisition. The major evolution today is the launch of a new, flexible and significant share repurchase program. Powered by our structural performance, this program enables us to compound long-term equity value while preserving our growth investments and our A credit rating.

This is new and already ambitious as we plan EUR 4 billion for share repurchase in the first 2 years of the plan, as Jérôme will detail later on. What is important is that having this tool in our toolbox is an additional way for us to accelerate value delivery to our shareholders at a level that reflects the potential of Air Liquide. We will execute it in a pragmatic way, keeping in mind all the levers of lasting value creation. And we will execute it with determination as we are confident in the long-term value creation capability of the group.

One key element that supports our confidence in the future is the exceptional Air Liquide teams. We will continue to empower our organization while embedding absolute accountability at every level. We have fully aligned our incentive structure with our BEYOND objectives, fostering a high-performance culture that is reflected directly in our delivered results. To our 65,000 dedicated employees around the world, we owe a huge thank you for their continuous commitment and passion to serve our customers.

Simply put, I believe that we have the finest, most talented team in the industry, and we are fully equipped and committed to deliver. To conclude this introduction, I hope you already appreciate the step change in our ambition and our confidence in delivering this strategic plan. There are a lot of materials built on very solid ground to support our BEYOND plan. The way we will drive our actions is through 3 interconnected pillars. First, we listen and care.

We listen deeply to and care about all our stakeholders, our customers, shareholders, employees and the communities in which we operate. This empathy and understanding is the starting point for everything we do and is truly a competitive edge. Second, we grow. Our top line expansion is powered by multiple highly diversified growth drivers and sustained by our innovations. Third, we perform, which gives us the means to grow. Listening and adapting has transformed Air Liquide into an agile, high-performance organization.

We will execute with precision, empower our teams and hold ourselves strictly accountable to deliver sustainable enhanced profitability. Now the leadership team will take you through each pillar step by step. Jérôme will then follow with the financial outlook. And I will wrap up before we open for Q&A. Thank you very much for your attention. Let's go BEYOND.

Thank you, Francois. Framing our strategy around 3 interconnected pillars provides a clear road map. In just a moment, Adam will explore our first pillar, we listen.

We always strive to listen to our key stakeholders. And this is even more important today as we navigate in an environment that is more and more challenging. We aim to be as close as possible to our customers and to listen and adapt to what they're telling us. We're a critical partner. And by listening to them, we can better anticipate their needs and their trajectories. We're well positioned to leverage these engagements into game-changing opportunities as we have the global scale and customer intimacy to do so. And we're using AI to improve the overall customer journey.

By embedding our solutions to evolving customer dynamics into our core strategy, Air Liquide consistently delivers high customer satisfaction metrics. And it's not only customers, we listen to and care for all of our stakeholders. We listen to employees. In listening to their collective voice, we hear what's important to them, a safe and respectful work environment, employee development and career opportunities, meaningful and engaging work and a simplified organization. Empowering our people creates an agile, high-performance culture that drives engagement and productivity. We listen to our shareholders.

Aligned with their priorities, we drive long-term value creation illustrated by the historic total shareholder returns that Francois presented. We match their desires for increased returns with steady dividend growth and now a robust share repurchase program. And we address concerns around climate risk exposures by committing to emissions reduction. We listen to society. We remain fully engaged in and offer full transparency to NGOs, suppliers, public bodies as well as the local communities in which we operate.

By listening and caring, we are then able to adapt and position ourselves for the best opportunities to grow our business in a resilient and responsible manner. And speaking about responsible growth, Diana will say a few words on our environmental impact. Diana?

Thank you very much, Adam. Turning to environment. And before starting, yes, it still matters. Actually now more than ever, we are convinced that performance, sustainability and resilience are closely intertwined. In practical terms, we strive for tangible impact. Let me tell you where we put the focus. First, we stay firmly the course on decarbonization, maintaining our target to reduce CO2 Scope 1 and 2 emissions by 33% by 2035. And how are we going to do that? Actually, through 3 levers: low-carbon electricity sourcing, active asset management, including the industrial efficiency projects and as well electrification. And last but not least, carbon capture and storage.

We are convinced that these actions will also improve our resilience. Let me recall that we have been able to reduce our Scope 1 and 2 emissions by 5 million tonnes since 2020 and that we have been able to sign 5.6 terawatt hours per year of low-carbon PPAs. And this is just the start. Second, we are introducing a new objective aimed at reducing direct water withdrawals at our sites. As water becomes increasingly scarce, reducing water usage at our sites, it serves both a performance and as well as a resilience driver. And last, we are raising the bar on climate change adaptation. In the face of accelerating climate change, we aim to strengthen adaptation plans around the world, focusing specifically on high-priority industrial sites and supply chain assets.

Over the past few years, Air Liquide has demonstrated its ability to combine financial and sustainability performance. In today's volatile world, environmental performance is no longer just a matter of conviction. It's a core competitive asset. By decarbonizing our own footprint and providing decarbonization solutions to our customers, we enhance our competitiveness, reinforce our resilience and we support lasting growth.

Thanks, Adam and Diana. Listening to stakeholders and acting responsibly has to be the first step of the process. Now let's step into we grow so we can see our active diverse sources of growth. Marcelo, Francois, over to you.

Thank you, Joe. As was pointed out, listening to our customers does more than inform our strategy and position us for future growth. Ultimately, it is what has driven our successful track record for 30 years.

That's right, Marcelo. It led us to develop and implement cutting-edge technologies in electronics, starting in the early '80s and to expand into home health care in the mid-90s.

Staying close on the ground to the regional developments helps us execute transformative acquisitions like Airgas in the U.S. and DIG in South Korea.

Listening to customers and understanding macroeconomics also had us building a defensive, resilient business, clearly demonstrated during global disruptions like the financial crisis of 2008 or COVID-19. Beyond resilience, we see plenty of attractive growth opportunities in the coming years on which we will elaborate further.

Growing that solid operational foundation over the long term provides an excellent springboard for accelerated value creation under BEYOND.

Powerful megatrends continue to redefine our industry, creating structural multiyear demand drivers across the world. Reshoring and sovereignty are driving the localized rebuild of critical supply chains. Technology and innovation will be heavily utilized to translate these macro shifts into long-term customer solutions. Digitalization and AI infrastructure, the massive expansion of computing power demands unprecedented semiconductor manufacturing capacity and will generate significant growth in construction, electrical equipment and metals. Aging population and urbanization create sustained defensive demand across health care.

These global trends translate directly into structural long-term growth vectors for Air Liquide throughout the BEYOND horizon to 2030. In basic commodities, in the context of reshoring and reconfiguration, we will capture new growth through industry's arbitrage of energy costs and supply. Our model adapts to the different speed and forms of energy transition projects by having a comprehensive set of solutions for hard-to-abate sectors. This will help to drive low single-digit growth in basic commodities.

In manufacturing, we support production electrification, automation and resources efficiency by developing or deploying systems and tools that optimize customer energy and resources footprint. This will sustain mid-single-digit growth in manufacturing to 2030. In electronics, we build on our comprehensive leadership position with ultrapure carrier gas on site and innovative advanced materials, delivering the uncompromising reliability and low carbon footprint required by Tier 1 semiconductor fabs.

This structural driver will support double-digit growth for Air Liquide in Electronics. In health care, to meet surging health care demand while navigating public budget constraints, we leverage our integral home care models, digital monitoring platforms and AI-powered solutions. This approach significantly lowers the overall cost to serve while improving patient outcomes, driving mid-single-digit growth.

Thank you, Marcello. You're absolutely right. Let's dig a little deeper. Under we grow, we showcase how Air Liquide compounds growth through multiple diverse sources of growth, maximizing our base, capitalizing on fast-growing end markets and executing targeted accretive acquisitions. This should lead to an overall sales growth of 5% plus or minus 1% all powered by our global innovation, and we tailor this strategy with precise differentiated execution across our geographic hubs.

First, we will get more from our base. We are refocusing to unlock maximum value from our installed asset base by increasing the capacity loading of our existing infrastructure by expanding customer density across key industrial basins and accelerating bolt-on acquisitions as well as restructuring others when required. Simultaneously, we will elevate customer value through advanced gas applications, which optimizes their processes and deploy dynamic tools that optimize price management. As always, we will be enforcing strict benchmarking to maintain top-tier industry-leading customer satisfaction.

Thanks, Francois. Let me start with a customer perspective.

[Presentation]

As you saw in this video, Air Liquide is a trusted long terms partner, an organization with whom our customers reliably grow. By pairing our technical experts with proprietary performance with databases, we directly optimize customer welding productivity across our merchant business. Beyond these core applications, we see expanding merchant momentum across the entire vastly expanding data center value chain supporting facility construction, power infrastructure, advanced cooling and safety systems as well as secondary electronic supply networks. These are a few examples of how we intend to get more from the base.

Moving on to our next source of growth, key growth markets. We're excited to give you a better understanding of these underlying drivers of these attractive markets. Let us begin with a video on a key growth market for us, electronics to showcase, in particular, our capabilities in advanced materials.

[Presentation]

As the video illustrates, this is a very exciting time, a unique growth opportunity with global chip volumes projected to compound at plus 8% annually through 2030, and I will show you why we are so uniquely positioned at Air Liquide. Our expansion in electronics is driven by a powerful compounding effect, growing chip volumes multiplied by rising gas intensity per chip from complex 3D architectures, advanced packaging and additional manufacturing process steps. As Air Liquide is a mission-critical partner for the semiconductor industry, we regularly meet with the top management of every key strategic player across the globe.

Just 2 weeks ago, in my exchanges with customers in the U.S. or last month in Asia, I could observe a key structural shift. The market is no longer the usual cyclical one we experienced in the previous decade, which was very reliant on consumer electronics. Demand is now driven by data centers, in particular, for hyperscalers, Google, Amazon, Microsoft or the likes. And they are taking all fab capacities for the next few years, hence, the acceleration of fab construction we observe. And moreover, demand for connected devices is currently undersupplied, and it is ready to take over.

So in that very exciting market context, it is important to remind that Air Liquide is the #1 market leader in electronics, trusted by the world's top chip makers. But why are we the #1? First, we stand apart as the only industrial gas player offering a complete value chain portfolio with carrier gas, advanced materials, electronic specialty materials, equipment and installation and services. Second, because we bring innovation. As the only industrial gas player in advanced materials, we develop our own patented molecules, thanks to our dedicated R&D. And we operate as an embedded developer directly alongside the top chip makers.

In carrier gas, we have developed our own advanced technology over the years and scales up our plants tenfold over a decade, and we are continuously improving their competitiveness. But third, we have the stronger customer intimacy. We have a completely centralized commercial organization, covering each strategic customer with a dedicated team of global experts that can replicate what we do well in each geography to ensure the highest seamless service to each specific customer. And I can assure you, our customers keep telling us they love it.

And you see with deep customer intimacy, decades of unmatched reliability and breakthrough innovation, our competitive advantage continues to strengthen. But now you might be interested in how this translates into growth. At the end of June, electronics represented 50% of the group's 12-month investment opportunities. And to capitalize on this extraordinary megatrend, we are deploying significant high-return strategic investments over the BEYOND horizon, supporting a highly derisked double-digit sales growth through 2030. And here is the kicker.

Over half of this growth is already secured by signed long-term take-or-pay contracts. So in more details, what are the growth drivers? As I said, we are delivering a clear, highly visible compounding engine in electronics, scaling revenues from EUR 2.5 billion in 2025 to over EUR 4 billion by 2030 and with a contribution tail extending well beyond 2030. So this is equating to a reliable double-digit annual growth exceeding 10% over the BEYOND period.

And this momentum is powered by 4 strong vectors: first, our high-performing installed base; second, the rapid extension of our high-margin Advanced Materials; third, and you like it, a locked-in derisked project backlog; and fourth, an aggressive pipeline conversion. Our backlog visibility today is nothing short of exceptional. It has surged by 80% over the last 2 years alone. And as of June 2026, electronics represents 40% of the entire group's investment backlog. And moreover, it is diversified and spanning over 26 major capital projects.

And in the upcoming 2 years, we will start up plants in every single strategic electronics hub in the U.S., in Europe as well as in Asia with China, Singapore, Taiwan, Korea and Japan. And you know this is really unique among all industrial gas players. So this geographical footprint shows that we are super well positioned to capture the growth wherever it happens. Air Liquide really sits directly at the heart of this industry's expansion. How are we going to deliver that? Our strategy leverages 2 growth engines, Carrier Gas and Advanced Materials. And together, they account for nearly 70% of our electronics sales today.

First Carrier Gases, you're familiar with them. They form our rock-solid foundation, generating stable, highly predictable cash flows backed by 15- to 20-year long-term contracts with full cost protection. With over 20 new facility start-ups scheduled through 2028, this represents long-term revenue visibility. And accelerating on top of that baseline is our high-margin Advanced Materials portfolio. Strong R&D portfolio, first-to-market advantage in the next-generation chip solutions create growth opportunities. And as an example, and as you saw in the video, our molybdenum precursors, which we were the first to introduce to the market are projected to grow at over 30% annually, driving both top line expansion and continuous margin accretion.

Today, our molecules play a direct role and they are now so well embedded in semiconductors that they are present in each and every smartphone and tomorrow, potentially in every data center. And now let's move to our second main growth market, the energy transition. Francois, the floor is yours.

Thanks, Armelle. At Air Liquide, our perspective is clear. Energy transition remains more than ever a priority, and it rests on 3 very solid arguments. First, climate change remains an undeniable reality and stakeholder demand for meaningful decarbonization has not diminished. In Europe, public policy and regulatory frameworks actively reinforce commitment to respond. Second, China views low-carbon technology as a major long-term competitive advantage and is now investing heavily to secure it and do not count out the U.S. We are seeing select opportunities developing there as well. We are firmly convinced that the energy transition is durable longer-term megatrend.

Third, the energy transition is key to risk management and security. But don't just take our words for it. Let's hear directly from our key customers on how they are navigating their own decarbonization journeys and how Air Liquide is partnering with them to make it happen.

[Presentation]

The structural growth market is underpinned in some geographies by industrial sovereignty and supply chain reshoring, and we possess the operational agility required to adapt to varying paces of the energy transition in each geography and create leading positions in an emerging but long-term market. Our energy transition pipeline is moving from strategy, to FID, to execution, to start-ups. Today, we have 8 major projects under active construction, ranging from EUR 100 million to EUR 500 million in dedicated capital investment. Leveraging our proprietary sometimes first-of-its-kind technologies, we are capturing high-value opportunities. In total, energy transition projects represented EUR 2.2 billion of our backlog at the end of 2025.

Looking forward, we expect EUR 2.5 billion of additional investment decisions in such projects between now and 2030. These projects will be carefully selected and rigorously screened to ensure they meet the same double-digit return hurdles and disciplined IRR requirements we demand across all of our capital investment. They will also carry the added benefit of long-term contracts with take-or-pay clauses. These projects will begin to contribute over EUR 700 million to top line growth during the BEYOND time frame and further contribute in the next period.

The energy transition is a key driver towards our top line growth to drive our EPS objectives by 2030 as well as to support our CO2 reduction engagements. Now let me hand over to Diana to speak about health care as the next key growth market. Diana, please?

Thank you, Francois. Our health care activity is a driver of robust growth and resilience for the group as it is decoupled from industrial production. It will actually deliver a robust and resilient growth of plus 4% to 6% during the BEYOND period. Now let me tell you what drives our growth. Long-lasting demographic and social tailwinds are unlocking health care demand around the world. Global life expectancy has increased by 8 years since 1995. The WHO expects a global shortage of at least 10 million health care professionals in 2030. Under budget constraints, hospitals focus more and more on acute and critical care. And as a consequence, health care payers are actively seeking value transformation to compress overall spending.

In this context, we have a unique position across the entire patient pathway from hospitals to patients' homes. By directly integrating our primary production footprint with our specialized medical gas distribution network, we seamlessly serve, for example, oxygen to hospitals all the way to patients with chronic long-term care at home. Why does it matter? We accompany the patient through every single step from hospital admission, diagnosis and prescription to the personalized care at their home.

And in case of exacerbation of their disease, the patient returns to hospital for acute care and afterwards comes back home again. We are there all along. And I can tell you from my recent visits of patients in Brazil, they all prefer to be treated at home and value our services, ensuring the continuum of care between medical gas at our hospitals and servicing patients at home. Why is it important? Not only it delivers enhanced patient outcomes, it also drives structural cost savings for overburdened health care systems worldwide.

Moving forward, starting with our medical gas activity, we will deliver growth by accelerating our always there value offer at hospitals. Thanks to our products and services, physicians and nurses can focus on their patients, and they tell me this is this precious time saved for them. Growth will be driven as well by expanding beyond hospital customers. Let me show you some examples.

We will serve emergency medical services, nursing homes in Europe and as well the ambulatory surgery centers in the U.S. This will enlarge our portfolio of customers while unlocking enhanced operational synergies. By aligning our marketing and supply chain capabilities with home health care and Industrial Merchant, we maximize synergies and add value for the long term. In home health care, market dynamics are very compelling. Global health care spending is projected to surpass 10% of global GDP by 2030.

Already today, chronic diseases are the #1 spending, driven in part by the stark reality that 1/3 of all adults now live with at least one chronic condition. At the same time, the structural shift from expensive acute care at hospitals to home-based care continues to gain momentum. All this accelerated by digital patient engagement and AI-powered augmented care. With these tailwinds, we create a highly resilient long-term growth and cash engine for Air Liquide. As the #1 global leader in home health care, we serve today 2.3 million patients across 30 countries with over 10 million annual interactions. So we are able to effectively manage high volumes to deliver this exceptional value to patients while actively reducing systemic health care costs.

Importantly, Air Liquide stands as the industry leader in profitable value generation. First, by combining a highly selective geographical footprint with continuous adaptive restructuring and very disciplined bolt-on M&A for density. We maximize operational leverage and help reduce health care spendings. Second, customer centricity as a core value. These relationships of trust with patients, caretakers and prescribers built over years through human and digital support, giving them the peace of mind and the ability to focus on what matters most.

Enhancing patient outcomes, we are delivering the right level of care at the best cost for health care payers. And last but not least, as a frontrunner in agentic AI, we unlock dual value for patients with an enhanced patient experience and for prescribers and payers by accelerating operational efficiency and scalable growth. Through standardized global processes and robust data governance. We scale AI solutions that transform the market while driving long term profitability. It's a key differentiator for us. Let me share a video on how we scale superior value in customer relations before handing it over to Marcelo.

[Presentation]

Thank you very much, Diana. A compelling growth catalyst for Air Liquide is the rapidly expanding private space sector, particularly in the United States. As technological scale drives down launch costs, launch frequency is accelerating, creating a near EUR 1.8 billion industrial gas market by 2030. Air Liquide has been supporting clients and building deep expertise across the entire space value chain for over 60 years. We currently supply every major space hub in North America. We are successfully leveraging our historical foundations with the likes of NASA and the European Space Agency to capture the high-growth potential of private launch providers.

While this high-growth market today consists primarily of merchant bulk volumes and equipment sales, we foresee a potential transition towards long-term over-the-fence supply contracts that secure return of capital invested. Even under conservative adoption curves, the growth runway in space remains very strong. Air Liquide has entrenched client relationships and expertise to capture this high-growth potential, making it a continued key growth market. Moving on to the next of our diverse source of growth, acquisitions. Francois?

Thank you, Marcelo. We remain very active in portfolio management throughout the ADVANCE period, closing 67 bolt-on acquisitions and conducting a major asset takeover in South Africa. Concurrently, we optimized our operational footprint, completing 29 targeted divestitures to ensure our capital is concentrated in high-growth geographies and resilient profitable businesses. Looking ahead into the Beyond strategic plan, there remains a long runway with 40% of the market still held by independent players.

Meanwhile, the post-merger integration of DIG Airgas is progressing flawlessly and adding meaningful momentum to our growth profile. Our objectives are clear. We will execute bolt-on acquisitions to increase network density, expand into new geographies and complete with strategic M&A to capture significant cost and growth synergies, all driving disciplined value creation for faster EPS growth. Moving now to the next of our diverse sources of growth, innovation. Over to you, Armelle.

Thank you, Francois. Now let me explain you why innovation at Air Liquide is an operational engine. Our technology leadership sharpens our competitive position. It unlocks new high-margin markets, and it drives long-term shareholder value. End-to-end innovation, which means taking breakthrough directly from the lab to full industrial plant scale is one of our primary growth engines, and it is also a core differentiator for driving market leadership.

Through our PACE framework, we accelerate time to market. We optimize capital efficiency. We secure first-mover advantages across fast-growing global markets. Our end-to-end innovation strategy spans 4 strategic pillars that cover the complete technology life cycle. First, pioneering future markets. We anticipate tech disruptions early. We position Air Liquide for long-term growth, for example, in Advanced Materials, like you saw in the electronics video, but also in deep tech and digital Healthcare, as shown before.

Second, accelerating industrialization of first-of-its-kind solutions. We scale game-changing energy transition technologies, including Cryocap for carbon capture, large-scale PEM electrolyzers, ammonia cracking and liquid hydrogen.

Third, competing through the optimization of total cost of ownership or developing AI to support our operational excellence. And last but not least, enabling new gas applications for our base to optimize existing customers' networks, like, for example, additive manufacturing, battery manufacturing and advanced chip packaging and testing.

Now I would like to illustrate with a few examples. Air Liquide technological excellence is pioneering Advanced Materials that push the boundaries of the infinitely small. By engineering breakthrough precursors and ultrapure materials, we enable chip makers to achieve unprecedented speed while reducing energy consumption, which is still a major challenge for this industry. And as the semiconductor industry scales towards the most advanced nodes and high-bandwidth memory, our own patented molecules are powering the world's most sophisticated AI chips.

And also through AI, we accelerate time to market for Advanced Materials to predict molecules properties and identify candidates for lab testing. In fact, we are not just supplying the market. We are developing the molecular foundation for the next generation of power-efficient ultrafast AI computing. Another example I would like to share in a completely different market. In deep tech, we develop frontier technologies and we cross-pollinate them across our global footprint.

Let's take our Turbo-Brayton cooling technology. It was originally proven on the International Space Station and scaled to over 300 units in LNG shipping. And now it is offering solutions for super conductivity cables and data centers. Finally, in Industrial Merchant, we innovate as well and in very strong connection with our customers to develop technologies to boost gas sales in every market. Let's take an example in additive manufacturing, a fast-growing market, surging from 200 million to over 450 million by 2030.

Our own patented flow mapping unit ensures perfect gas distribution during 3D printing. And why is it important? Because this innovation makes Air Liquide completely indispensable to the process and drives high-value gas sales worldwide. Air Liquide leverages its global scale and first-of-its-kind technologies to transition breakthrough discoveries from successful pilots into commercial market opening solutions. We systematically derisked and scaled assets across our core growth market.

Electronics gas units, we talked about them, but carbon capture and storage, electrolyzer, ammonia cracking for energy transition and space, of course. Looking ahead to 2030, we will drive innovation-led growth by leveraging our global integrated lab-to-plant organization with our 5,000 experts and 300 more partnerships and of course, maintaining a disciplined spending of EUR 300 million per year. Air Liquide remains the undisputed innovation and tech leader in our industry.

Thanks, Armelle. We clearly have multiple growth drivers across Air Liquide. Now let's see how that's balanced per geography. For that, Adam, Emilie and Ronnie are joining us and will detail Americas, EMEA and Asia, respectively. Let's start with Adam for the Americas.

I am very bullish on the Americas. Under the Beyond strategic plan, we're targeting a top line sales growth of 5% to 6% per year. These are great numbers. As the market leader in the U.S. industrial gas sector, we will leverage our unrivaled platform to capture significant growth by capitalizing on strong domestic growth tailwinds, driven by a doubling of the overall electronics gases market by 2030, the U.S. market growth is further supported by some key trends, including reshoring, data center proliferation, infrastructure, defense and space.

Crucially, structurally competitive domestic energy costs ensure long-term industrial activity and strong operating leverage. And we're leveraging our position. In IM, we continue to densify our packaged gas business, maximize asset loading, manage the price cost curve and accelerate bolt-on acquisitions. And Healthcare is positioned to gain volumes both in and out of the hospitals with price being supported by increased value offers.

Look at the momentum in electronics. We have secured major landmark wins across the United States backed by hundreds of millions of dollars in targeted investments across advanced memory, leading-edge logic and high-bandwidth memory advanced packaging. And future project development for electronics looks equally impressive. Major carrier gases start-ups and Advanced Materials business will push our electronics growth rate in the United States above 10%, which is significant.

We signed contracts in Large Industries and get this, we've already secured over 80% of Large Industries and Electronic start-up contributions for the Beyond period in the United States. Over to you, Emilie.

Thanks, Adam. So let's move on to EMEA. We delivered growth while taking decisive actions to restructure and optimize our operational footprint. In Europe, as high energy costs weigh on the competitiveness of the industry and our customers, we are proactively reshaping our asset base and rightsizing our operations to offset headwinds. Navigating this environment requires deep regional expertise and our experienced leadership team is driving exceptional resilience and agility.

This agility allows us to capture high-value growth in Europe. We are leveraging our strategic asset base and our market leadership in the region and across energy transition, Healthcare and electronics markets, supported by a highly skilled workforce and innovation capabilities. Throughout the Beyond plan, we aim to deliver a resilient plus 2% to 3% growth. Key growth drivers include the start-up of 5 very large energy transition projects currently under construction, including the Normand'Hy electrolyzer, which you've all heard about and which will start up in a few weeks.

We are also pursuing selective new contracts in hydrogen, carbon capture and cement while capitalizing on sovereignty and reshoring trends. By accelerating asset loading and optimizing our footprint, supported by a steady growth in our Healthcare business that represents 30% of total EMEA sales, we are positioning Europe for long-term profitability. Meanwhile, across Africa, the Middle East and India, our growth trajectory is accelerating, powered by major project start-ups, strategic asset takeovers and an energized Industrial Merchant strategy centered on pricing discipline, asset loading and bolt-on acquisitions, we are targeting above 10% sales growth.

So to conclude, if you remember one thing, by pairing selective and profitable high-value growth in Europe with significant expansion opportunities across Africa, the Middle East and India, EMEA stands as a solid engine of long-term value creation. Over to you, Ronnie.

Thanks, Emilie. Asia is a powerhouse, home to 5 of the top 20 industrial gas markets, which are mature, stable economies, but with incredibly dynamic high-growth economies because of the semiconductor expansion. We leverage the group because we'll have synergies in innovation, process standardization and operational efficiencies. How will we build and drive our #1 regional position in electronics? We're well on our way to committing upwards of EUR 3 billion of carrier gas investments over the Beyond period. We're already expanding our high-margin Advanced Materials footprint. We doubled our operational scale in South Korea following the DIG Airgas acquisition, and now we leverage.

And we're driving competitivity in our products through modularized standardized solutions. Because of this, Electronics will now be 40% of Asia Pacific revenue in 2030, up from 29% in 2020. In Large Industries, we're going to find high-value strategic asset takeovers, and we'll optimize our network loads and we'll capture the high-value petrochemical wave in China, which is just beginning.

In Industrial Merchant, we will have network density because of accretive bolt-ons. And with our strong commercial and pricing discipline, we'll have sustained margin growth. Our top line growth goes in hand-in-hand with bottom line performance. Relentless execution, we commit to strong margin expansion, underpinning our 8% to 9% top line revenue growth across Asia.

We've established how listening to our needs of our stakeholders drives our growth. Now let's focus on the next lever, how Air Liquide will step up margin improvement. To walk us through We Perform, I'll turn the floor over to Matthieu.

Performance is in Air Liquide's DNA. Today, my objective is to outline the concrete actions driving our margin expansion. We are committing to a plus 400 to 600 basis point margin target by 2030, and here is exactly how we will deliver it. First, we are not starting from scratch. In 2024, we launched a deep transformation program to significantly boost profitability, shifting from a decentralized model towards a more globalized performance-driven culture. With Beyond, we are stepping up, targeting, as I said, an additional 400 to 600 basis points over the next 5 years.

Execution rests on 4 complementary pillars: active commercial management and operations, organizational streamlining, global structural efficiencies and local efficiencies. Underpinning all 4 pillars, AI-powered operations are a key transversal accelerator. In short, this level of margin improvement is not an aspiration. It is a structurally back target. So let's go through each of these pillars.

Let's start with the first one, the commercial and operation [ lever ]. It represents familiar ground for Air Liquide, and we are dramatically accelerating execution to maximize margin expansion. We are systematically optimizing our price/cost trade, driving high-value volume and mix and constantly rightsizing our portfolio. In fact, our active portfolio management, which, as mentioned by Francois, comprised 67 targeted acquisitions and 29 strategic divestitures over our ADVANCE period proves our discipline. We are continuously deepening footprint density in core basins while exiting noncore margin-dilutive assets.

Let's now go through the 3 remaining pillars. Let's start with our streamlined organization. First, we are mobilizing a streamlined, highly agile organization built for sustained performance. We are leveraging further a model that has already delivered strong results. Since late 2023, we have reduced headcount, excluding scope changes by 4,000 or 6% of our workforce. We've achieved this by reshaping our geographies and global business unit, flattening our structure, removing up to 3 management layers globally and integrating operations such as merging Medical Gases and Industrial Merchant in Europe or shifting our Canadian activities directly into our U.S. operational setup.

This enabled us to capture immediate high-value synergies. As we transition into Beyond, we are maintaining this momentum. As an example, based on top-tier consulting benchmarks, we are rightsizing corporate functions to represent under 1% of total group headcount, refocusing our head office strictly on core strategy, company policies and performance monitoring, a very simple model, ensuring a strong operational discipline.

Moving to our second pillar, global efficiencies, representing 50% of the structural efficiencies under Beyond. As we evolve from a decentralized model, we are now unlocking the full power of our global scale through disciplined governance, standardized end-to-end processes and enterprise-wide tools convergence. We are driving this strategy across 3 high-impact pillars: Industrial excellence. We have established a unified global industrial direction to roll out high-return operational initiatives worldwide, and David will detail them.

Procurement scale. After expanding our global procurement organization with members no more reporting to local operation, we are now expanding centralized sourcing and leveraging our global volume in leading competitive regions to capture more structural cost reductions.

In Global Business Services, we are freeing up local operational teams from transactional tasks across finance, procurement, IT and HR. Our GBS organization stands at over 1,700 associates in low-cost geographies and we will double this capacity by 2030 while reducing headcount in high-cost countries. This is a major step in our operating model transformation. We already processed over 3.5 million of supplier invoices per year in this organization. It is one of the many, many demonstrations of the foundations we have built and that will propel us further.

Supporting all 3 functions is our digital and IT team and of course, our AI infrastructure built explicitly to deploy AI application at scale. So David will detail our industrial operations, fuel our Beyond ambition. The unified global industrial organization that is built is a benchmark model that we are now replicating across additional functions. Through relentless internal and external benchmarking, simplified and standardized process execution and an AI-boosted knowledge platform, we are instilling a high-velocity performance culture that accelerates excellence across our organization. David?

Thank you, Matthieu. A new unified single global industrial organization is key in delivering Beyond strategic ambition, a true engine for competitiveness. We are directly impacting our market competitiveness by rolling out worldwide standardized programs enforcing rigorous process simplification and global standards. At the same time, we are targeting to increase our asset loading by 10%, optimizing CapEx spending for new facilities while maintaining a best-in-class reliability of supply.

Underpinning all of this is a high conviction, resilient, performance-driven culture. Day after day, we are laser-focused on our core top 20 core manager KPIs. This, combined with a modernized knowledge management platform, as mentioned by Matthieu, to drive frontline efficiency and clear accountability. Together, these focuses gives us execution clarity needed to drive operational excellence. Now I'd like to illustrate through a video how some of our industrial initiatives are generating value. Take a look at how we are truly optimizing our end-to-end operation with variable various tangible examples.

Specifically, do listen to the comments directly from our end-to-end centers.

[Presentation]

The video showed how we, at Air Liquide execute today. I really like the intervention of Sarah and Elena. We have some great talent. Across our supply chain, we are moving fast from initially optimizing processes in isolation to a true, and this is important, end-to-end integrated model, radically changing how we operate. This approach delivers immediate tangible value and new pockets of optimization.

Let's dive into how we are transforming primary production through cutting-edge automation. We are transitioning all our facilities into autonomous self-operating plants that run seamlessly without requiring continuous on-site presence, targeting over 95% of our sites worldwide by 2030. What does it mean? Well, all sites will be equipped to be unmanned by design. Across these facilities, we are embedding advanced AI predictive maintenance, anticipating equipment failures before they happen. We target cutting production incidents by more than threefold by 2030.

On top of that, guided by our proprietary AI, our units run continuously at peak performance with an objective to react 50% faster by 2030 to capture new real-time opportunities in volatile energy market. This unprecedented level of automation delivers a structural step change in safety, reliability and efficiency, strengthening our competitive advantage and strongly supporting, again, this is important, our margin improvement ambition.

Let's turn now to regional end-to-end optimization, and this is one of my favorites. Orchestrated across 8 end-to-end centers called and control towers, this model breaks down silos to unlock large-scale synergies by dynamically linking the production capacity of fully autonomous self-operating plants, like I just mentioned, with customer demand across the pipeline, bulk logistics and bulk customer storage. In short, because it was complicated, powered by advanced AI, we optimize production and distribution at the same time, adjusting output in real time to capture ultra-competitive volatile energy pricing.

This end-to-end optimization sharpens our market competitiveness, locks in permanent structural efficiencies and strengthen customer acquisition. The solution is currently being deployed across our 8 end-to-end regional centers. Now let's look at what improvements we are driving in our packaged gas filling station, the end of our supply chain. First, we are deploying standardized production tools across all our main sites, 600 of them, targeting a plus 50% productivity increase by 2030. Just last week, I was in Eastern Europe with the local team, and they were already showing a plus 44% increase in their productivity numbers. And we are not even in 2027 yet.

Second, in logistics, our digital solutions are optimizing route management, driving a 20% increase in cylinders transported per kilometer, a direct benefit to the margin.

Third, in site operation, we are using advanced planning and layout optimization to streamline cylinder movements within our storage facilities, while targeting a 20% reduction of references across this activity. As shown in this video, harnessing data and AI is transforming our logistics and operation into streamlined workflows, unlocking structural is important efficiency and creating shared value with our customers. Now Matthieu, back to you.

As you understand now, artificial intelligence at Air Liquide is driving real-time decision-making, unlocking unprecedented productivity and compounding our competitive moat. AI is now fully embedded in our business. Every single member of our organization is equipped with Google Gemini, supported by an active community of 800 AI champions. We are using AI to transform our core business. Through 5 targeted transformation road maps, we are sharpening our focus on high transactional activities, cost, price management and commercial efficiencies to drive real impact today.

And make no mistake, we are only at the beginning of our AI journey. We sit on an extraordinary foundation of over 3.5 billion industrial data points and over 20 million of orders every year. While we standardize, map and [ mine our processes ], harnessing this massive proprietary global data stream will enable us to build responsible and high-impact innovations that secure a long-term competitive edge. Our core business transformation is actively powered, as I said, by 5 focused AI road maps, deploying agentic AI directly into our daily operational workflows.

And we set ourselves very challenging objectives. In addition to the concrete illustration in industrial operations covered by David, we have many, many great examples to share. In engineering and technology, we target AI agents to cut our time to offer by 25%, delivering fast, high-precision proposals while accurately predicting permitting and regulatory constraints ahead of time. In sales support, our commercial AI agents power over 1 million annual customer visits. And one of my favorite use case is definitely our AI helps optimizing dynamic pricing strategies, targeting the best prospects and streamlining data input straight into our CRM systems. In customer care, automated speech to text streams live data into our ERPs. AI agents seamlessly handle 230,000 monthly calls across Home Healthcare France.

The rest of Europe and Airgas are next. When you globally handle 1 million calls per month, it is very powerful. Lastly, in patient care, AI optimizes complex back-office prescription workflows, creates hyper-personalized care plans and predict sleep apnea treatment drop-offs early. Full deployment is, of course, a priority. You understand that these 5 road maps are actively supporting our performance every single day, and it will further accelerate in the months and years to come.

All these initiatives I've just covered are driven globally. Now let's turn to local efficiencies and what they mean in practice. While global scale provides immense leverage, 50% of our structural efficiencies are unlocked directly at the local level. By automating routine tasks through standardized global processes and operational discipline, we free up our teams to focus on what matters most in the field, deep market knowledge, safety and operational excellence and of course, first-class customer service.

This local responsiveness secures world-class safety and reliability, our essential license to operate. To conclude on how We Perform at Air Liquide, we are confident in our ability to deliver our target of 400 to 600 basis points in margin improvement by 2030. This ambition is backed by concrete operational actions. And everything you've seen today is already in motion, driven by robust transformation program, scalable AI and disciplined local execution. I want to thank our teams around the world who are making this performance happen day in and day out.

Thank you, Matthieu, David. Having explored how We Listen, We Grow and We Perform, we arrive at a financial foundation of our strategic plan. To get more details, I'd like to welcome Jérôme. Jérôme, would you take us through the financial platform that serves as a springboard for Beyond?

Of course, Joe, and good day, everyone. Air Liquide's resilient business model has delivered a solid track record. Looking at our published results, Air Liquide has consistently expanded delivering throughout its economical cycles. Having weathered the 2008 great financial crisis, the 2020 global pandemic and a repeated geopolitical energy shocks, we achieved a 30-year top line CAGR of plus 6%. As a strong earning compounder, we demonstrated robust operating leverage with EPS growth at plus 7% over the same period. Through our strong cash flow generation of plus 7% and the remarkable strength of our balance sheet, we maintain our commitment to shareholders return, growing our dividends at an impressive plus 9% annual rate.

At Air Liquide, consistently creating shareholder value is in our DNA. Indeed, over a multiyear horizon, Air Liquide share price has substantially outperformed the CAC 40 index, reflecting the resilient compounding nature of our business model. Our commitment to dividend is on a clear display with growth even accelerating to plus 38% cumulative over the last 3 years. Looking at total shareholder return, we have posted strong double-digit TSR across 5-, 10- and 20-year horizon, outpacing the broader market.

And with the Beyond strategic plan, we are positioned to accelerate this momentum even further. Historically, we delivered steady gains in our operating margin. But over the past few years, however, we have significantly accelerated that trajectory as clearly demonstrated by the graph on the left. The significant step change in margin improvement, has generated over 600 basis points of OIR margin gains over the past decade. This, of course, is excluding the energy impact.

The 3 main drivers of margin improvement over ADVANCE were: first, pricing, specifically Industrial Merchant pricing, which grew by over 30% over the advanced period. Second, delivering efficiency to the sum of EUR 2 billion, showing the success of the initial phases of our group transformation program. And third, active portfolio management with 67 additional accretive acquisitions and 29 divestiture. Together, those levers delivered a significantly more efficient and effective organization, reinforcing the strong foundation of our business model.

Regarding foundation, first, Air Liquide boasts a diversified global footprint operating across 60 countries with 4 million customers and patients. Second, we execute with discipline, maintaining a double-digit minimum IRR threshold with strong contractual terms and conditions. Third, our resilient business model is valued and now more than ever by all stakeholders. Indeed, our diversified footprint services, 90% of industrial segments globally and more than 30% of our sales are under 15-year contracts.

Fourth, we remain agile, both locally and globally, thanks to our footprint and strengthened by our group transformation program and now by leveraging artificial intelligence. Fifth, we invest approximately EUR 300 million annually in innovation, maintaining our position as a cutting-edge leader with several first-of-its-kind technological solutions. Since 2017, Air Liquide's cash flow expanded at nearly 11% per year, strengthening its balance sheet and providing capital allocation flexibility for strategic growth and acquisition like Airgas in the U.S. and more recently, DIG Airgas in South Korea. Despite those transformative acquisition, we successfully deleveraged our net debt-to-EBITDA ratio from 3.3x after the Airgas acquisition down to a healthy 1.5x. This is a strong foundation from where now we launch.

Thanks, Jérôme. From there, could you walk us through the actual objectives of Beyond?

Of course. Launching of a strong foundation, as I said, Beyond aims to maximize value creation. As highlighted by Francois, our 3 strategic objectives are first, EPS at 10% on a compound annual growth rate; two, value creation with ROCE target above 11% in 2030; and third, CO2 emissions reduction, minus 33% by 2035. To dive deeper, first, sales growth at 1.5 to twice industrial production. This back-end loaded growth has been covered throughout today's presentation. Second, margin improvement. We will deliver between plus 400 to plus 600 bps over Beyond, building on the acceleration of advance and which would represent a milestone of plus 1,000 bps over 10 years from 2020 to 2030 time frame.

Third, capital allocation. We will continue with our disciplined project development, accretive M&A and dividend payments, now combined with our new flexible share repurchase program. Under Beyond top line expansion, margin improvement and capital allocation are complementary levers and not objective. By fixing between the 3 as market conditions dictate, we protect profitability, and we are very confident to deliver to our plus 10% EPS growth objective.

That's very exciting, Jérôme. Thank you. How would that break down on a per business line basis?

Well, let's start with Industrial Merchant. This is projected to deliver plus 4% to plus 6% sales growth, propelled by organic volume expansion from a specific focus on asset loading, sustained pricing management and accretive bolt-on M&A. Then Large Industry, this will generate plus 1% to plus 3% growth. 40% of start-up ramp-up growth is already secured through new project starts. However, this will be partly offset by base erosion in some geographies.

Moreover, as I will show on the following slide, we are undergoing a structural shift in our business model where absolute OIR expansion provides a far more accurate reflection of our true operational growth than the top line revenue alone. Electronics is set to deliver above plus 10% growth, over 50% of which is already secured mostly by new projects coming online. We will capitalize our #1 position, robust project backlog and unique position in Advanced Materials.

Finally, Healthcare. This continues to serve as an exceptionally resilient and steady growth engine, targeting plus 4% to 6% growth through organic expansion and select bolt-on acquisitions.

Jérôme, as you know, margin is a key focus of the market today. Could you help investors understand why this alone does not fully capture the performance and may not actually be the best indicator?

Sure. This is important, Joe, but let me start first with our top priority, which is reinvesting in the business with strict capital discipline. Over the past decade, we have delivered a step change acceleration in industrial investment decision, scaling up to the range of EUR 4 billion annually. Now looking ahead until 2030, we project a cumulative EUR 24 billion in industrial investment decision, heavily anchored by growth in the Americas and Asia. Alongside this growth CapEx, we will continuously reinforce our foundation by investing in asset renewals, efficiency programs and world-class safety protocols.

Crucially, every project must clear our strict minimal double-digit IRR hurdle rate to support our overarching above 11% ROCE objective. Furthermore, embedded in our investment decision process our CO2 emission reduction objective. And finally, we aim to maintain a diversity of projects so as to not overexpose ourselves to geopolitical or single project concentration risk. So now, Joe, let me spend some time on explaining our financial model to address your question, which is again very important.

As you will see, Absolute OIR growth will serve as a more accurate aggregate measure of a project's financial contribution rather than top line growth. Let's start by tracking a project life cycle. On the left, in our portfolio of opportunities, we -- where we apply a stringent project selection process based on returns to ensure every investment clears out strict mid double-digit IRR hurdle rate. We deliberately select premier locations, leading counterparties and high-quality assets underpinned by long-term take-or-pay contracts with anchor customers to derisk our investment.

Once the project clears our screening project, we reach a formal final investment decision. The project then enters our committed backlog, initiating the construction phase, which is illustrated on the slide. CapEx time line typically average 2 to 3 years for medium to large projects and 3 to 5 years for very large industrial facilities. In the example here, we present a theoretical EUR 200 million CapEx project. Following an evenly split spend over 4-year construction phase, OIR steadily ramps up over 2 to 3 years before reaching the steady run rate through to the end of this theoretical 15-year project.

So why the shift to OIR from sales for new project? There are a few drivers, and now we start to look at capital intensity. Starting on the left, capital intensity indeed varies significantly across our product. It can range from roughly 3x for air gases to 1.5x for hydrogen production. So considering 2 projects, ASU, SMR with identical CapEx and higher hurdle rates, the hydrogen project will generate higher sales and thus will have a lower OIR to sales ratio.

Similarly, subsidies meaningfully impact margin ratio. Indeed, our backlog consists of the total gross CapEx of the project. However, our project economics are calculated on net CapEx. So the takeaways here is that overall capital intensity varies significantly based on factors like project type and subsidies. This leads to difficulty in sales modeling. So therefore, a higher variability of OIR on sales. And therefore, you know OIR will be more predictable to model. Additionally, the energy impact is different by geography and contract structure. While it's fairly standard that energy costs are passed through to customers, energy costs vary greatly across region. Consider, for example, 2 identical hydrogen SMR projects, same size, CapEx and secured IRR in the U.S. and Europe. When natural gas in the U.S. was about EUR 9 per megawatt hour, Europe was averaging a staggering EUR 80 per megawatt hour, EUR 9 versus EUR 80.

But the total sale, including energy is much higher in Europe than in the U.S. Thus, the calculated OIR to sales ratio in this theoretical example is 16% in Europe versus 35% in U.S., same CapEx, same IR. So as you see, the impact on energy cost and ratio is also seen in contract structure of energy transition and Electronics projects. Those customers often secure their own energy, which is eliminating the need for industrial gas company to secure and pass through energy price.

Again, an example, identical to project, the project with energy pass-through reports much higher sales than the identical project without energy pass-through. All else equal, the OIR in absolute value would be the same, but the margin ratio OIR to sale is so much higher without energy pass-through. So the main point again is that sales may not reflect the company's growth and OIR to sales ratio may not fully reflect business performance. It's very important. The dynamics of OIR in absolute value is much more informative and is and will be [ reflected ] in our new EPS objective.

As our business model has evolved, marked -- sorry, by increased variance in capital intensity, heightened energy price volatility, regional energy price disparities and a higher proportion of contracts without energy pass-through in our backlog, top line sales and sales derived KPIs are not the most representative indicators to our performance. Today, absolute OIR growth stands out primary metric to track growth, strategic progress and individual project contribution.

And while margin percentage remain an essential short-term guiding tool, our primary compass for the long term remains return on capital employed. The key message is that ROCE is our long-term compass.

No, that makes sense. It's very clear. Thank you. We announced a big change in our capital allocation policy with share buybacks. What are the key takeaways for investors?

Well... Thank you, Joe, for this question. To start with, it is Air Liquide improved performance, which now is allowing for a new optimized capital allocation framework. First, our overarching priority remains to invest in the business. Second, we will accelerate selective value-accretive acquisition, bolt-on but also larger strategic acquisition. Third, we remain committed to growing our dividend, targeting a steady payout ratio of approximately 60%. And now fourth, powered by the strength of our balance sheet and an improved performance, we are enhancing shareholders' return even further by introducing share buybacks as a pillar of our capital allocation framework.

We have established a robust but flexible to other opportunities, share buyback program authorizing an initial EUR 4 billion in cumulative repurchases through 2028. So moving forward, share buyback becomes a component of our capital allocation policy and shareholders' returns framework. Furthermore, maintaining a solid A credit rating remains an anchor of our capital allocation discipline. So through the execution of our BEYOND strategic plan, we are unlocking the potential to up to double our average annual shareholders' return compared to the ADVANCE period.

This will be driven by a robust dividend policy with a payout of around 60% and again, our new flexible share repurchase program. Finally, none of this would be possible without the dedication of the teams. Everyone at Air Liquide is fully committed to delivering our objectives, and we have explicitly aligned our incentive structure to guarantee accountability. For our top 350 senior leaders, including the executive committee, our annual bonus plan is directly tied up to -- sorry, directly tied sorry, to core operational execution. Beyond annual incentives, our long-term plan extends to over 2,700 managers group-wide, aligning leadership directly with 3-year performance goal.

This structure clearly ties the success of our shareholders with the success of our leadership. Additionally, and specifically to the IM sales force, we continue to standardize global incentive system to aggressive best-in-class practices. Those incentives are accelerating the shift to an enhanced performance-driven culture at Air Liquide. So we have the technology, the balance sheet firepower and the disciplined culture to deliver.

Thank you very much, Jérôme. And now I'll turn it back to Francois for his closing remarks.

Thank you, Joe. I trust that by now, you see how much of a step change what we have shared with you today represents. Beyond the figures and targets, our commitment to delivery is extremely strong. We have a clear trajectory, the right levers in place and most important, the right mindset. That's why I have -- we have confidence in our ability to create lasting value for all our stakeholders. I would like to conclude to summarize for our existing and future shareholders why more than ever, Air Liquide offers a premium investment case.

You have seen that we are very well positioned in many growth markets. You know we have a strong business model that we continue to refine. You have seen our track record in improving our profitability. You appreciate our expanded commitment to deliver lasting value to you. And finally, you should be as proud as we are to invest in a responsible company. Thank you for your attention. I know it has been a lot of information today. Let's take a short break. I am really looking forward with the rest of the team to answer your questions during the Q&A session.

Let's take a 5-minute break. We'll meet up in the Q&A setup where the executive team will take the stage for the Q&A.

[Break]

Welcome back. We will now start our Q&A session by taking first a few written questions from the platform. So I will ask Joe, if you can read the first question, please.

I sure can. Before I start, a quick reminder written question just hit the button at the top right of the screen. First question -- regarding the M&A strategy, it's clear that bolt-ons will be focused in the coming years. Given the $22 billion to $25 billion guide and investments in the business and some balance sheet flexibility, can we expect a larger acquisition?

All right. Thank you very much. I will take this question. Yes, as we mentioned already, M&A is part of the strategy. It was in the previous plan, but we want to accelerate that bolt-on acquisition, Industrial Merchant and Home Healthcare, mostly, but also potentially strategic larger acquisitions like the one we have done in Korea with DIG. Of course, prudent, we have to be too. So it's not possible today to be more specific on that. What we see is there are some regions of the world where there are potentially opportunities in the framework of the BEYOND plan.

The good news is that we have the financial capabilities to seize those opportunities. So we'll do that whenever there are opportunities that make sense for us.

The second written question, how should we normalize Healthcare margins versus peers given Air Liquide's greater Home Healthcare and service content? What would a truly like-for-like comparison look like?

Thank you very much, Joe. I will ask Diana, please.

Thank you. I was really hoping you would ask that question. So to be clear, our Home Healthcare activities are well aligned with the profitability of the group, and they are very much in line as well with the progression that we ambition for our group. Now where we operate, and you remember, we are not for Home Healthcare in the United States, we are even better prepared and better positioned than our competitors and our peers. So -- and why is that? It's because of the value we generate for our customers and patients.

Thank you very much, Diana. I guess now we are ready to take some phone questions from people attending. So please go ahead.

[Operator Instructions]

We will now take the first question from the phone coming from the line of Martin Roediger from Kepler Cheuvreux.

Thank you for taking my 2 questions. The first is for Diana. Your Healthcare business has been growing organically by 6.6% in the last 5 years. What was the split into volumes and pricing? What is the risk that pricing could become negative? And just a clarification, are you interested in a sizable acquisition target in the U.S. homecare market, which is currently up for sale? My second question is to Jérôme. On the 1% to 3% per annum growth in large industries until the year 2030, you mentioned erosion in some regions, which offsets partly start-up contributions. Can you talk about this erosion?

Thank you very much, Martin. As a matter of fact, indeed, Diana is going to answer the first one. But for the second one, I think I will ask maybe the different head of the region to give you a feel for the LI growth because it's quite different from one region to another one. So Diana, it's clear.

Yes. Thank you very much. Excellent question. So how do we compare the health care growth between the previous 5 years and the BEYOND plan? To be very clear, in the past, we had a very strong price dynamic and especially because you asked about home health care again. In home health care, we have had a positive price pass-through in the past years. Looking forward, what we see is that we have a very strong volume ambition embedded in our plan because we expect with the tensions on some health care systems that pricing will probably be at less dynamic as in the past years.

Nevertheless, in addition to our organic volume growth, we have as well a very strong bolt-on M&A ambition embedded in the BEYOND plan. And of course, we continue to look for opportunities to grow, may it be externally, organically and as well for sizable acquisitions. Now as I mentioned in my previous response, the U.S. home health care market for us is not one that we target.

Thank you very much. So, Large Industries, maybe I think what would be the most useful and relevant is to start with the U.S. Adam. Maybe a few words about Europe and then finish with APAC on Large Industries because indeed, it's quite different. Adam?

Yes, absolutely. So in talking about the U.S., I think there's 3 key points from a Large Industries standpoint worth mentioning. The first one is around infrastructure. The second is around activity and volumes that we see. And the third is around development. From an infrastructure standpoint, our infrastructure is best-in-class. So when I look at it, it's an infrastructure that's expanding. It's the largest amongst our peers in terms of our air gas infrastructure that we have, particularly on the Gulf Coast, and it's one that we're continually renewing and expanding.

When we look at volumes, we see volumes for the chemical sector and volumes for refining, and those volumes have reached historic highs for us, particularly along our pipeline systems, but also in some stand-alone on-site assets that we have.

And then the third sector that I'll talk about or third piece is really around development. We've had, for the past couple of years, very active development in Large Industries in the U.S., and we see that continuing. So we did sign 2 projects that we announced at the beginning of the year, one in the chemical space with Oxea, the other in the steel space with Hyundai Steel, both of these contributing to low-carbon products, which is great for the future. But we also see ongoing developments coming. These will contribute towards the end of the period in terms of growth for development.

So clearly, Large Industries is going to contribute to the 5% to 6%, at least percent growth for the period.

Absolutely. And it will also contribute co-products, which will help the merchant sector as well, which is another very strong space for us.

Yes. Thank you very much. Emilie, Europe.

Sure. So Large Industries in Europe. So the industry in Europe is transforming for sure. So some of the industry is moving to decarbonization like the cement players, some steelmakers as well as refining. And you've seen some example in the presentation just earlier with some start-ups in electrolyzers coming soon.

Other part of the industry, like the chemical industry, is restructuring, suffering more and restructuring. We accompany our customers all the way. This is part of our listen and care, obviously. And for us, it means also we restructure in some places to adapt our cost structure to the level of activity, and we optimize our network. In some cases, we even shut down some old inefficient assets where there is overcapacity. So overall, I would say, in Europe, the forecast is, like, LI to remain flat, about flat with some new opportunities offsetting the headwinds and the base erosion, I would say.

Okay. Thank you very much. APAC, Ronnie.

We, for sure, also have a super diverse customer base and a little bit of both stories that you just heard there. In China, for example, with the 5-year plan that they have in China to go upstream on petchem, we see more growth and more opportunities. But then we have some other basins where there's also some restructuring, maybe even some erosion. Overall, though, for Asia Pacific, Large Industries is an important contributor of that 8% to 9% growth rate.

Thank you very much, Ronnie. So overall, we see that in Large Industries, there is this momentum by region, by sector. And all in all, I think what we need to take out is that wherever there are opportunities to modernize the asset base or to capture new opportunities to support the transformation of industry, that's what we will continue to do in BEYOND.

We will now take the next question from the line of John Campbell from Bank of America.

Thank you for the presentation that really goes into detail on your business. I wanted you to maybe kind of expand upon the margin improvement. So you kind of outlined goals for 400 to 600 basis points of improvement over time. Could you perhaps outline and articulate the assumptions that are trying to kind of drive those 2 scenarios? And what is basically required, I guess, to reach the midpoint? And would you consider the midpoint the most likely of that kind of range?

Thank you very much, John. Good talking to you. Maybe Mathieu, do you want to take this one, please?

Sure. Thank you, John, for the question. So if we go back to the margin ambition, so we set for ourselves a very ambitious 400 to 600 basis point margin improvement, as you mentioned, that is going to drive our EPS. As we mentioned during the presentation, we are accelerating. If you compare to ADVANCE, we were at 360 basis points over 4 years. So now clearly, over the next 5 years, we want to speed up.

What's important is that we are in motion. We are -- we have a structurally backed plan with a lot of examples across all the pillars that we mentioned. I'm going to remind them again on global structural efficiencies, local efficiencies, organizational streamlining and last but not least, active commercial and operational management. So these 4 pillars are interconnected.

Today, the -- I think it's fair to take the midpoint as an assumption. That being said, if we can accelerate if the market or the macro condition allows, we will certainly do it. If AI allows us to go even further, we will do it. And again, we don't want to give too much variation per year, take that as an average with the midpoint as the basis of the scenario.

We will now take the next question from Alexander Sloane from Barclays.

Two from me also, please. The first one just on the balance sheet. If you could help us maybe understand balance sheet assumptions through the period in a little bit more detail. I mean, specifically, the EUR 4 billion buyback, how much of that do you expect to be funded from free cash flow versus maybe stepping up debt? And more specifically, where would you expect net debt to EBITDA to peak over the course of the strategy period?

And the second one, just on Electronics. I mean, interesting for the other 3 businesses, you've given kind of a range, whereas Electronics is framed as above 10% but without a defined upper limit. So could you help us sort of understand what the upside case looks like here for Electronics? I mean what would need to happen for Electronics growth to maybe materially exceed that 10% through 2030?

Alex, I think the first question is a wonderful question for Jérôme and probably the next one for Armelle. Jérôme...

Thank you very much, Alex. So basically, you're right. We are -- it's a very big event on the fact that we have raised about EUR 4 billion share buyback for -- until 2028. The question is how we'll fund it. So we'll fund it from cash flow, but also mainly from leverage, debt and also in order to -- we have the balance sheet. We're at 1.5x EBITDA to net debt at end of June. So we'll leverage from this. And that will be, I would say, the main catalyst. I will not give any precise number in terms of how do we want to raise, but our objective is what we say, we want to keep the A category range both on Standard & Poor's and Moody's. So that's basically our main assumption so far. Thank you.

Thank you very much, Jérôme. Armelle, upside on the Electronics, what it would take?

Yes. Thank you very much for the question. So first of all, I would like to remind you that we are committed to outperform the market. I mentioned 8% market growth in volumes, which is the real indicator for our sales. And we are committed to deliver more than 10% growth. Half of this growth is already solid and in our books.

Now you remember, we have 2 main levers, carrier gases and Advanced Materials. If we look at carrier gases, we are -- they represent around 50% of our investment opportunities for the next 12 months, and we have a far larger portfolio in front of us. But you know well the business model. When we sign a contract, we need 3 years, 2 to 3 years, depending on the geography for the ramp-up and the sales to be effective in our numbers. So clearly, what we are going to sign in '27, '28 is going to contribute above the BEYOND period.

So I would say the real lever on above this 10% is Advanced Materials. It depends on faster adoption on our key molecules. Here, we have a fantastic market advantage being the first one in that market. And if I take an example, you've seen on the video and I've talked about it, molybdenum, for example, where we have already a solid manufacturing base in Japan, in Korea and in the U.S. to see the growth where it is. And it comes hand-to-hand with our own patenting equipment, which is absolutely key to deliver the product at the fabs. Thank you.

Thank you very much, Armelle. I mean those are -- this one is a very good example, I believe, where the innovation is really helping us to develop the top line and to take a competitive advantage. So I hope it's going to be soon a blockbuster for sure. I think we -- maybe we have a written question, Joe. Go ahead.

Sure. On green renewable hydrogen, could you provide an update of your projects and give us an overview of your future pipeline? More broadly, what is your view on green hydrogen strategy. What minimum level of regulatory support, carbon price or customer premium is currently needed to make renewable hydrogen projects economically viable in Europe.

So since we are talking about Europe, Emilie, your turn.

Thank you. I'm happy to get this question. So on green hydrogen, I'll try to be short. But overall, on green and low carbon hydrogen, we still see a good momentum in Europe. We have 5 major energy transition projects under construction that will deliver and contribute within BEYOND in low carbon and in renewable hydrogen electrolyzers. So you mentioned some of them.

Normand'Hy electrolyzer will start up soon, and it's fully loaded. ELYgator in the Netherlands will come after. It's fully loaded as well. And we also have low carbon hydrogen for biorefineries in La Mede or Grandpuits. So a very strong momentum. Overall, those projects are supported by existing regulations. So those projects are already viable. And keep in mind that the RFNBO hasn't been transposed in all European countries yet. So there are more opportunities to come.

Thank you very much, Emilie. So I think we have a list of written questions. Maybe we take another one.

Sure. Given the number of bolt-on acquisitions that the company has made and continues to make, how is the company managing integration risk associated with this? For example, the management of different culture -- corporate cultures and styles, different processes and teams, customer disruption during integration processes.

That's a great question. So maybe just to be concrete, 2 examples from 2 parts of the world. Maybe Marcelo, you talk about Airgas because you've got quite a powerful integration and acquisition machine. And maybe, Ronnie, if you want to say one word about maybe Korea, I think, would be useful. Marcelo?

Thank you, Francois, and thank you for the excellent question. In the case of Airgas, if you remember, Airgas was created in 1982, and it started as an independent company and grew through acquisitions until the merger with the group 10 years ago. I would say it's embedded in our DNA to accept the differences and at the same time, to drive the company with the right culture of respect, of performance, of safety, which is always one of the key topics that we need to address every time we acquire a company.

95% of the companies we acquired so far are basically asset deals where we bring customers, we bring assets and eventually a few of the associates that are working for those independent companies. And I tell you, the track record of performance of Airgas has proven that the model works and will continue to be very successful. By the way, we want to accelerate those bolt-ons in the coming years of BEYOND, not only at Airgas, but also in other geographies in the world.

Thank you very much, Marcelo. And I trust that you have a complete and well-structured playbook for the integration, being the safety, the operation, the IT...

[indiscernible] and so on and so forth. Very strong playbook...

It means that very quickly, and that's why we insist on density, very quickly, those bolt-on acquisitions in the U.S., but also in other geographies are quite accretive to our business.

Absolutely.

Yes. Another example of a larger site in a different environment, Ronnie.

So I love this question. Just a few weeks ago, I was in Korea for our Customer Day, where the 2 businesses that we merged together met our new customers, wonderful. But the answer to the question is basically proactively. So of course, we have to look across process, legal entities, tools, our business engagement, everything. But really, the most important thing is the culture, and it's in the question, so I really appreciate that. It shows that we understand what this is about.

When it comes to the DIG integration, the 2 cultures of the Air Liquide business and the DIG business were a long way apart. But what's happening now in Korea is the teams are creating their own culture for the future. And that's the key to these kind of integrations as well as all the process and you have to be great at the process, but really the culture. Thank you.

Thank you very much, Ronnie. Maybe we move to the live questions from the phone. The next one, please.

The next question is from the line of Laurent Favre from BNP.

Two questions, please. The first one is on the target to increase loading by 10%, I guess, across the network. And I was just wondering what exactly are you going to do differently, 10% sounds like a pretty big number for a company that has been well managed for a long time. That's the first question.

And the second one for Jérôme is around the backlog and I guess, all your presentation on how we cannot rely on sales or margins. And I fully understand that the most important point is OIR that returns. So I was wondering what can you tell us that could help us on, I guess, modeling of the EUR 6 billion backlog in terms of how it flows, if we cannot use a rule of thumb on sales and if we shouldn't be assuming a certain EBIT margin?

Thank you very much, Laurent, and good afternoon. I will ask David to answer the first question, which will give some time for Jérôme to try to think about the answer for the second question, which is not an easy one as we discussed previously. So where is David? David, please?

Thank you. And thank you very much for the question. Of course, responsible for industrial operation, asset loading is definitely an indicator which is close to my heart, but it's definitely also a leading indicator to return on capital employed. To your question on what is the current loading. Of course, it's very difficult to answer at global level. We have very different supply chain, very different product. However, it is correct that in some assets, in some regions, we are below 70%. And those are specific areas where we want to boost the asset loading to above 80%.

The way we will do it is really 3 ways. The first one is to ensure that the assets are actually delivering what they should be. So this is looking at availability, making sure that they are optimized and that they deliver the product and output that we expect and that we need to sell. The second one is a bit more thorough is where we have cross-functional team really looking at the basin situation and define the commercial policy. But that means also realigning the incentives. It means also relooking at the commercial strategy and how do we densify and leverage the asset in its location. And I would say the third one is also at looking at some of the assets probably would need to be retired as well. So it's also looking at the viability of some of these assets.

Thank you very much, David. I think now Jérôme is up for the answer.

Thank you, Laurent, for this interesting question. So you're right, the modelization of growth coming from the backlog is getting more and more difficult because you have different capital intensity. You have the weight of the energy, which can be very much different from, for example, the U.S. and in Europe and which can be multiplied even by 10. So going freely from backlog to sales is something that we stop, and that's why we stopped to, I would say, to publicize in the last quarter.

Now having said that, how to do it, I would say, the best way. Our performance is very much now to be modelized by absolute OIR because that's naturally flowing into the EPS growth. And that's why today, we are moving into the EPS growth of plus 10%, minus 2%, plus 2%. That's basically what we have to do. And that's why sales lever cannot be an objective per se. That's why we have to concentrate more and more on the EBIT, and that's what we will going to do in the coming years. And that's very much what -- also one of the key messages that I wanted to pass during this presentation is that the absolute value in sales really today is not totally meaningful in fact. That's the way we could think about it.

Thank you very much, Jérôme. I do believe we have another question online. So the next question, please.

We will now take our next question from the line of Josh Spector from UBS.

I had a follow-up that kind of combines a few of these together. It seemed like when you guys are talking about margin, the commentary around density also seems to include some commentary around M&A. So I'm curious if M&A was maybe less of a contributor than what you expected. Is that a risk to your margin targets? Or are those margin targets more organic skewed?

Well, I think let's talk about maybe M&A and how do we want to use M&A in terms of density for IM. Marcelo, do you want to speak about that because that's a clear focus.

Yes. Thank you, Francois. And a few words. And again, the bolt-ons, they have been key to the strategy of many of our geographies in terms of growth. But before we speak about the impact to the profitability, I think what matters is really the strategic impact of each of the targets that we are bringing into the company. So I'll give you examples of several opportunities I have seen in the U.S. where companies they are heavily dependent on hard goods with very limited penetration in important customers, and we decided not to pursue those acquisitions. So yes, it's a key lever. I think we did relatively well as a group in many of those acquisitions in terms of number.

The market is changing and is shifting, as you know very well. In some areas, we see EBITDA multiples going super high. So we need to continue to be super careful and strategic on those acquisitions. But again, the densification topic, M&A comes into play. But it's not the main, I would say, lever that we pull in terms of densification. Densification means how we measure the market, our participation, concentration of customers and how we play commercially and from a strategic point of view to bring the best in terms of value, not only to the company, but also to our customers in general, Francois.

And I think what is very important to keep in mind is that given our footprint, I mean, we've got almost always the choice to grow organically or to do M&A. M&A is a way to accelerate. So that has to be, of course, I mean, the right seller, but also the right price to do that. So in the U.S., in China, we have also a clear strategy like that.

So I don't believe this is a risk to our margin target because we've got other levers clearly. And if we can seize the opportunity when it makes sense in terms of M&A, we'll do that. Maybe I will just use that question to ask Diana to talk about M&A and bolt-on M&A in home health care because that's an important part of the strategy also.

Yes, absolutely. And it's clearly as well an accelerator compared to our previous plan, where bolt-on acquisitions accounted for about EUR 90 million of sales, whereas what we have embedded in the BEYOND copy is EUR 280 million of bolt-on M&A. So it's clearly an accelerator. And to be very clear as well because you earlier asked the question of profitability, we are targeting relative acquisitions. So the bolt-on M&A within the first 2 years should be at least at the level of our current profitability and even contributing for us to accelerate our profitability improvement.

Thank you very much. I think we have another question waiting. Please, the next question and after that, we'll take another question from investor, which is a written question. Next question online, please.

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

I had a few questions. I'll start with the most important one. I'm a bit curious why have you shifted from focus on organic sales target to total? Because I remember last time when we had and even in the previous plan, there was always an organic focus, and it seems this time it's missing. So perhaps you can detail why that is the case.

Second, I think, Jérôme, you mentioned in your presentation that the sales growth will be back half loaded or back-end loaded. I mean if I just do some simple math, you're guiding to 5%. I would probably estimate about 30 bps from DIG Airgas in terms of average contribution over that period. So we are left with 4.7%, which is not very different from what consensus has for the next 2 years. So are you saying that's probably a bit too high and you are expecting that to come in more latter half of this decade?

And the third question I had was just going back to one of your slides where you had the hurdle rate for your large projects. I think it was in energy transition, and I saw a number of more than 10%. I'm just curious because I somehow remember that it used to be a hurdle rate of more than 12% in the past for on-site projects. Has that been reduced? Or was my sort of thinking wrong that it was always more than 10%, not more than 12%?

Thank you, Chetan. So I will answer some of this question, and I will ask Jérôme to talk about the sales growth profile for sure. Just to comment on the organic sales versus the total sales. Why are we doing that? We are doing that for a very simple reason is that as part of the strategy, you see that there are opportunities to make some acquisition, bolt-on and more significant one. You understand with what we just mentioned that this is really part of the strategy to improve the density, I mean, to reach new markets also. So at the end of the day, it just reflects the capital allocation, either to invest in our own facility or to make acquisition.

And that contributes to the EPS.

So giving the view of the total growth of the company, I think from an investor point of view, that's what you want to see, how we managed to grow the business. And again, we are very fortunate to be in a segment of the economy where there are opportunities for acquisition. So let's make sure that we register that. Regarding the profile on the growth, Jérôme, do you want to answer that, and I will finish with the hurdle rate.

Thank you, Francois. Thank you, Chetan. So you're right. In fact, when you look at the profile of the sales during the period, the sales growth are a little bit backloaded at the end of the period for the main reasons that you know that we have the, I would say, the impact of the start-up and ramp-up of the large energy transition project and electronic projects. So that explains a bit of that, even though we are not talking about huge difference. But it's true that the sales profile is quite a little bit backloaded at the end of the period.

Regarding the hurdle rate, what you have to keep in mind is that we keep the same objective of having a 12% return for the portfolio. What was mentioned was some specific first of their kind, I would say, project in the energy transition, for example, where we accept to have a lower return because sometimes, I mean, we have to enter the market to demonstrate the technology. But all in all, and I think that's what is very important, we keep an extremely clear discipline on the capital allocation. You know very well, and this is the key KPI to measure the value that we are creating with the return on capital employed. And that's why we want to have a portfolio which is in the range of the 12%.

So no worries about some projects where we have made a strategic move. I think that has helped us to take a clear leadership, especially in the energy transition where, for example, in Europe, by far, we are the industry leader to offer low-carbon solution to our customers. As mentioned by Emilie, we see a great potential. Our customers are telling us, and you have heard that on some of the videos that we are really a leading partner for the energy transition. And I think that is really valuable now and for the future. I do believe that we have a question -- a written question from an investor. So Joe, maybe if you want to read, we have a couple of those. Go ahead.

Sure. Rather straightforward one to start. Are you planning to make more divestitures?

Jérôme?

Yes. The answer is we are -- you remember the question -- the fact that during the ADVANCE period, we made some significant portfolio management, about 69 acquisitions and the rest in divestiture. So about one-off, I would say, pure M&A items. So is the -- the question is we will continue to do that. Of course, portfolio management will always be on our agenda. It depends, as Francois said, there will be some -- potentially some acquisition and divestiture. But clearly, we continue to do so. And you like the name, and we like the name. There is no taboo in this world. And we continue to look at the profitability versus accretive opportunities. And this will be, of course, on full of our agenda. Although today, there is no specific announcement to make.

No, I think that's very clear. That's part of the active portfolio management. We have done that with no taboo, and we'll continue to do that. Next question, Joe, please.

Sure. Industrial Merchant is probably the cleanest productivity comparison. Where do you see the biggest remaining gap versus best-in-class peers, pricing, logistics, density, revenue per employee, procurement or overhead?

Let me think about how to answer this question. Maybe we take a specific example. I saw that Marcelo is already up. I think he wants to answer. Go ahead. Let's -- since we are talking about, I would say, a clear footprint, let's talk about the U.S. with Airgas.

Thank you, and thank you for the very good question. It gives me the opportunity to speak a little bit about Industrial Merchant. But specifically, Francois, to your question on Airgas in the U.S. and in Canada, I would say, given our size today, the level of coverage we have in the market, both in a physical presence and our online capabilities. If you look to the level of density we have managed to build in the U.S. in the last decades. You saw in the presentation, a demonstration of the level of expertise we have developed and the resources we have, how Airgas and the group, this very powerful combination in terms of innovation, digital AI capabilities, just to speak about a few dynamic pricing as an example.

If you take any of those KPIs, are we the best in all of them? I'm not sure, but we are, in my view, at Airgas kind of a reference to the market. Back to the question in terms of M&A. And when we look to our peers, I think Airgas is ahead of the game. Are there opportunities in terms of improvement? Of course, I think, David, you mentioned about densification and asset loading. We discussed about densification and M&A. The dynamic pricing AI-driven, I would say, applications is a reality, and we have to continue to leverage on that.

We do have both in Europe and also in China, not to say in Brazil, also a strong presence where good practices are happening. And that's what the World Business Line with my other hat in terms of responsibility is doing when we discussed in the past with the community about the commercial and industrial initiatives that is there to continue to drive not only growth but growth with the right level of profitability in general.

Thank you, Marcelo. What I take out from this question, which I do believe is a very interesting question. It's not an easy one. It's wherever we have a presence and we have managed to build the density infrastructure, we are top of the industry and very often market leader, not only in terms of performance, but I would say also, and maybe you didn't mention that, in terms of customer satisfaction and loyalty, your NPS in the U.S. is twice basically the industry -- the second one in the industry.

So on top of very good performance, when you manage to have a loyalty of customer, which I think is very important. But I think there are some regions, and again, Industrial Merchant comes in a lot of different, I would say, size and profile where we don't have the critical mass. And maybe thinking about that, a good example would be to talk about how we address that. And Ronnie, do you want to mention that?

Yes. So when it comes to density, it's exactly the mindset that we brought to our acquisition program that we run in the last few years in China. But the real answer is it's Industrial Merchant, you have to work on all of it. So what Marcelo said earlier about the discipline around density, that comes first, right? But you have to work on pricing, you have to work on your supply chain, procurement, overhead, revenue per employee. All of our acquisitions that we are doing in China come with incredible integration effort to make sure that we can pull all of those levers. So all of them and density.

Thank you very much. Let's go back to live question. I think we have another question.

Our next question comes from the line of Jean-Luc Romain from CIC CIB.

It relates to your improved competitiveness. Could you elaborate on the way you plan to reduce your CapEx by 15% on new plants? And does it mean that like EUR 1 billion of CapEx under the ADVANCE plans would translate into EUR 850 million more or less under the new plan for the same equipment or for the same air separation unit?

Jean-Luc, I love your question, and I'm going to direct to Armelle, who is in charge of technology and got the engineering. So Armelle, please.

Yes. Thank you. So it gives me the opportunity to talk about my favorite topic, competitiveness of our plants. So I remind you that we have a full integrated engineering, EPC engineering. We design, we manufacture and we build our plants. And we have a full program that we call compete, which enable us to work on a continuous basis on our competitiveness.

How do we do that? So we screen the market, a lot of market intelligence to understand where is the level of competitiveness. And here, it's absolutely key to operate in the Chinese market where we compete with local players. And where you can win in the Chinese market, you are quite sure that you can win anywhere. So that's where we look for our benchmarks. And after we work on all the different levels to decrease the TCO. So it's a full program, and we follow every deal to ensure it is managed on a continuous basis.

One just a great example, I mean, besides China, where China, I think, is really the place where it's a playground for competitiveness is India. Last year, you managed to win a very competitive bid for the largest plant in the world. I mean do you want to say a few words about that because that was super competitive and it demonstrates that on a pure equipment and CapEx, of course, CapEx and OpEx part, we are extremely competitive.

Yes. Thank you for mentioning that, Francois. So last year, it was a sale of equipment for a very large metal player in India. And in fact, we won. It was a very competitive bid, and this is the largest ever oxygen plant in the world.

So technology leadership and competitiveness. So great illustration, good job of the engineering team. Next question, please.

Our next question is from the line of John Roberts from Mizuho.

Energy transition was EUR 700 million increment in sales to 2030. Is space expected to be of a similar magnitude, much smaller? Or maybe you could just bracket that for us? And then my second question is a little more technical. You highlighted ammonia cracking in your press release. It's only been done at small scale previously. So does your new technology represent a step change in scale? And what's the timing there?

Thank you very much. So the short answer for space is that it's much smaller today than the energy transition. But maybe since the action is taking place in North America, Marcelo, again, comment on space.

Yes, of course. And thank you. I was expecting this question to come. I think, first of all, just to align on the understanding on the way we see the market, and I think we all agree on that. In terms of expansion and dynamics, this market is going through a real revolution. And I still believe we are just scratching the surface of what may come. The second point, I think, to highlight is if you look to the breakdown of the market, and it's difficult to give you today any number of our ambition in this market because this is changing. We mentioned just in the presentation, we see this market in 2030 being in the range of EUR 1.8 billion in terms of size.

We have 3 main markets that we can address with our technologies and products and services being obviously the space transportation market. So propellants represent probably 60% of this market, but we still have important markets for us to continue to develop, which is manufacturing and testing and also the satellite propulsion market. So just to conclude, Air Liquide, first of all, we are very present in this market, as we mentioned, for more than 6 decades, including the U.S. We are probably the only industrial gas player with covering the entire value chain in terms of our technologies from launch to satellite and advanced cryogenics, for instance.

We have a presence. It is not only a small presence in the main hubs in the U.S. physical presence through our air separation units and also footprint. Just to give you a figure, I think it's important to mention, we speak a lot about Blue Origin and SpaceX and others. We were the ones in 2022, and made the first ones to sell a SpaceX first ASU, and we believe air separation plant that this market in terms of propellant, it will primarily develop under a sale of equipment market, but this market may shift.

So the third point to make is that we keep the flexibility of our strategy of our business and revenue models. We've been supplying bulk to those players. Now they are moving to their own self-production with a few over-the-fence opportunities. And Air Liquide as a group, we are going to grab and I can tell you and we are going to bring the right level of participation in this market as soon as we also guarantee the right level of returns. So that's my comment.

Thank you. You can tell Marcelo is full of passion for space market. All right. Thank you very much. You had a second question on ammonia cracking, which is also very interesting. That's one area where Air Liquide, again, is taking a lead in terms of technology, but not just lab scale, industrialization. The action is taking place in Europe, not only in Europe because we have a few other projects developing elsewhere. But maybe, Emilie, do you want to speak about this?

Sure, absolutely. Thank you for the question, and thank you for your interest in ammonia cracking. So we started in R&D, obviously, to develop this technology and then moving on to pilots. And now we are at really an industrial pilot stage where it's based in Antwerp, and we produce hydrogen. It's been ongoing for 1 year already.

So we are now at this stage where we can develop offers for our customers who want green or low-carbon hydrogen based out of ammonia cracking. So basically, if you crack green ammonia, you will get green hydrogen. In our mind, this is one of the routes to produce green or low-carbon hydrogen. It's competitive. So it is very promising. And it's really one of the promising routes where, once again, we can really make the difference, thanks to our innovation and techno capabilities.

But clearly, if I may just build on a little bit on that. Don't sit down because I'm going to ask you more. I think one of the things that we want to do and you want to do is to actually connect an ammonia cracking to the hydrogen pipeline network that we have in Europe, which seems to give a real advantage. Can you elaborate a little bit on that and how you want to play that between the different ways to produce low-carbon hydrogen?

Yes, absolutely. So there are several basins in Europe where we are -- so we are the leader and where we supply hydrogen to our customers and through different production assets. So you can have an SMR to produce gray hydrogen. You have electrolyzers, you have green ammonia crackers. And all of these assets are connected through a pipeline to produce hydrogen for our customers. And you can adjust based on the power price, based on the needs, based on the PPA you have to supply your electrolyzer, for instance. So this is really where Air Liquide, we create most of the value when we really are in the basin and we optimize different assets to produce to different customers.

Thank you very much. So we have still 10 minutes to take a question. I see that we have some written questions. Joe, maybe.

Yes, happy to. The next written question reads, your growth targets for LI and IM imply an acceleration versus the run rate of the past 2 or 3 years. What are the key drivers of this acceleration?

All right. Francois, do you want to quickly answer this? Take a microphone.

Thank you for the question. Believe me, that's a question we asked ourselves because we would not have published a strategic plan without having an answer for us. So it's really a critical element. Industry is moving. World GDP is growing. So the question is agility, looking at what's happening where it happens. And we combine here what we do with asset loading, what we do with redevelopment, what we do with the energy transition because we believe that the people that are starting to transition are the ones that will be the players of the next decade.

And as we transform the assets, we can also transform the sources to have the competitiveness on the merchant market. And when you combine the transformation of the assets, the marketing we are putting in place together with the bolt-on acquisitions, we're absolutely convinced that we will capture more than our fair share of the growth. Now can we tell you if it's going to be in the U.S., in Europe or in China? That we don't. But we manage the portfolio so that we can catch the opportunities wherever they appear.

Thank you very much, Francois. And what we like very much is that more than 40% of our growth in Large Industries is already secured. It takes time to build the plan. So what we are going to sign is going to contribute for the end of the plan. And of course, for the next time because after BEYOND, of course, there will be after BEYOND. Next question, please, Joe.

Sure. In the next 5 years, how significantly will AI redefine internal collaboration?

That's a great question. Matthieu, you manage your -- the AI initiatives. So go ahead.

Thank you, Francois, and thank you for the questions. So difficult to talk about strategy without talking about AI in 2026. So we are putting a lot of efforts into our road map, of course. So internally, the first layer we are looking at is clearly how we can enhance our teams and how they can use better AI. So we've deployed basically Google Gemini to our 65,000 associates, so they can use it every day, 800 AI champions, 430,000 training sessions. So I think that layer is absolutely there. People are looking at it. They are using it every day, and we see this incremental efficiency and productivity coming from it. So that's the key one.

Then we are moving to what is going to change intrinsically the way we work at Air Liquide, and we've decided to be extremely focused and to concentrate ourselves on the programs that are going to move the needle. And so we have a few road map that I mentioned earlier during the presentation. We are extremely targeted. And basically, we are rolling that through our organization. It's fully embedded into our plan. But of course, it is changing every day. So we will probably or certainly accelerate in the months and years to come.

So my colleagues touched on a few topics already today. What you understand that AI is absolutely everywhere. Actually, we have more than 1/3 of our processes today that are already impacted by AI. So I can give you 20 examples. So we have only 5 minutes left. So I will only pick one. The one that I probably prefer the most because you talked a lot about it is around the sales force effectiveness. So we are basically using AI to select the right prospect in line with density, densification. So we know where we want to go. We know how to prepare ourselves. And basically, all of that is streamed directly into our CRM system. So AI is for us every day, something that we use. It's the same for our team, and it will only accelerate in the next few years.

Is this something which is working today or this is just an idea?

No. Today, it is working. Again, we are -- when you look at what we process every year, today, we have more than 1 million calls a month where our teams are already using AI every day to enter data into the system. Our sales team are using it every day. So everything that we have mentioned today is live. And again, it's already impacting 1/3 of our processes.

Great. Thank you very much. We have a last question, at least last question we will take on the platform, a written question.

What could disrupt your business overall?

Interesting question. Indeed, if we have 4 minutes to conclude on that. I think overall, probably what could disrupt our business, which could disrupt, I would say, the world economy is a major turndown due either from an economic crisis from a geopolitical context. So that's probably, I mean, would be the biggest risk. The good news or the positive news, I would say, is that you see by now that there's a lot of things which are self-help improvement. And you have heard our commitment. You understand also the flexibility that we have to play with the different levers. So I do believe that an event like that would have an effect on the global economy, on our customer, but probably much better than many others, Air Liquide will stay the course in this context. We have last -- at least we will take one more and last question live. Please go ahead.

We will now take our next question from the line of Sebastian Bray from Berenberg.

I have 2, please. The first one is on the buyback. When is the most likely time for this to get going? I suspect it's the start of '27, but just wanted to check. And the second one is on the long term. If this company is going to be hitting 25%, 26% EBIT margins by the end of the strategic period, if it hits its goals, do you view that as a natural long-term level beyond that period? Or is it too early to comment?

Sebastian, I will ask Jérôme to answer the first question, and I will finish with your last long-term question.

Thank you, Sebastian. So on buyback, so our commitment is to go and to execute the program, and we'll want to execute by end of 2028, the latest. We'll see how we can execute it depending on the market condition. Also, we're looking at the best way to operate them. But basically, I cannot give you an exact, I would say, agenda so far. But clearly, it's on top of our agenda to execute it, I would say, as soon as possible. And again, EUR 4 billion by end of '28, the latest. That's clear.

Sebastian, thank you very much for outlining, I mean, the ambitious margin improvement by 2030. But of course, this is not the end of the road. And we have internally, I mean, a high ambition for Air Liquide because we do believe that we have the potential to continue to create value. What you see here is, again, I do believe an ambitious plan. But you see also that there is a lot of grand ideas, initiatives behind that, both to improve the efficiency, but also to improve the top line and to grow.

So all in all, we feel very comfortable about the trajectory that we are outlining in BEYOND. But by no means, this is the end of our ambition for the plan and I would say, after the plan.

I think it's time to conclude. So I would like to thank all of you for your attention. I hope you enjoy the session as much as we did, and you share the excitement of the management team to look ahead with this new strategic plan. I would like to warmly thank the management team who is here, but also all the contributors to make this event as lively, instructive, extensive as possible. I do look forward to meeting some of you in the next few days during our roadshows being in Paris, in London, in New York or in Boston. And I know that we will meet or talk with many of you also during the Q3 announcement at the end of the month.

Today is just a start. I trust that you see already that with BEYOND, we are clearly raising the bar and that Air Liquide is entering with excitement and determination a new chapter in lasting value creation. Thank you very much again, and I wish all of you a good day. Thanks.

Good morning, ladies and gentlemen, and welcome to the Air Liquide First Half 2026 Results Conference Call. [Operator Instructions]. I will now hand over to the 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. François Jackow and Jérôme Pelletan will present the first half 2026 performance, for the Q&A session, we will be joined by Emilie Mouren-Renouard; and Adam Peters, both VP, overseeing respectively, EMEA and North America. Adam is [indiscernible] from the U.S. For our next events, we look forward to welcoming you to our digital Capital Markets Day on October 5. Let me now hand you over to Francois.

Thank you, Aude, and good morning, everyone. It is my pleasure to share Air Liquide's operational highlights for the first half of 2026. Against [indiscernible] demonstrate its resilience, delivering sustained growth and strong financial performance. [indiscernible], while driving robust execution today, we continue to secure our long-term growth trajectory through a record volume of new project signings.

Let's start with Slide 3. Our first half results clearly be affirmed the structural strengths of our business model. Comparable sales growth increased to 3.5% in the second quarter, landing above expectations and representing a pickup compared to the 1.9% in the first quarter. This positive momentum was primarily driven by strong underlying performance across both booming electronics and improving industrial merchants. Overall, sales growth in the second quarter reached plus 5.2% excluding FX and energy, bolstered by the successful and speedy integration of DIG Airgas in January.

The strong top line performance validates our proven ability to drive growth both organically and through highly disciplined acquisitions in core geographies. At plus 110 basis points, margin progression is well on track with all levers of our transformation program contributing. Recurring net profit reached double-digit growth, up 10%. Cash flow remained strong, up plus 8%, both excluding currency impact. Our recurring ROCE stands at plus 11% in spite of increased investments, which demonstrates our disciplined capital allocation and improved performance.

Our strong cash flow and balance sheet give us the firepower to continue to invest in the long term. Indeed, the first half of 2026 is marked by record-high signings, driven by an exceptional momentum in electronics and several major projects in large industries. This drives our backlog of signed projects under execution to another record of EUR 6 billion, up versus EUR 5.5 billion in Q1 '26.

Combined with our active M&A strategy, this directly secures our future growth. Our ESG KPIs remain firmly on track with a few noticeable progresses this semester. One is the start-up of 2 renewable electricity sourcing contracts in [ Secunda ] in South Africa. As of now, close to 50% of these contracted sourcing has already started up, aligned with the objective to reduce the group CO2 emissions by more than 30% in one of the largest industrial gases production site in the world by 2031. So in summary, in the first half of 2026, despite the macroeconomic conditions, we have not only successfully delivered simultaneously on growth and profitability, but also prepare the next phase of growth. This is truly the interim strength of Air Liquide.

Now on Slide 4. Air Liquide remains intensely focused driving strong margin expansion across our 3 main levers. We reached accelerated industrial merchant pricing of plus 5.2% in Q2, successfully addressing inflation through smart pricing management. We delivered also almost EUR 300 million of operational efficiencies in H1, through continuous improvement and executing, and that's very important, our structural transformation program. We pursued accretive portfolio management to optimize our footprint and increase our local density. We are successfully executing our rigorous margin expansion plan, delivering, as you see clear and measurable results.

Moving now to Slide 5. We are driving an exceptional momentum in electronics, signing new projects and strengthening our #1 leadership position. In fact, in just the first 6 months of 2026, our electronics project decisions reached over EUR 1 billion. If you think about it, that's 1.5x of our total for all 2025. The momentum is supported by a diverse mix of projects and geographies, almost all driven by artificial intelligence needs. Looking at the various projects on the slide.

Following our acquisition of DIG Airgas in Korea, we further leveraged our global relationship with key players like SK hynix, with project wins both in the U.S. and in South Korea. In the U.S., we secured 3 large-scale projects during the first half, representing a total investment of over $480 million, all dedicated to advanced chips with leading semiconductor manufacturers. Meanwhile, in Asia, our project signings achieved outstanding momentum, totaling more than EUR 550 million. These wins reinforce our global market leadership and give us strong visibility on long-term profitable growth.

On Slide 6, we are capturing the growth in large industries with the signing of 3 major projects in the first half. They expand our presence in the U.S. and directly support U.S. industrial reshoring. In large industries in the U.S., we are investing $350 million under a new long-term agreement to supply air gases to Hyundai-Posco in Louisiana for the landmark low carbon steel plant. This new infrastructure directly supports the development of critical domestic and low carbon materials. It also enables our customer international expansion while actively contributing to the reshoring of American industry.

In Texas also, we strengthened our long-term partnership with Oxea Chemicals by expanding our production capabilities at their base City site. This strategic $200 million investment involves the construction of a new, highly efficient plant to produce low carbon in gas and hydrogen. This project will reduce the group CO2 emissions by 64,000 tons while providing also additional capacity. This project, and that's important, underscores our technological leadership to capture profitable growth in a key U.S. industrial basin while supporting climate objectives.

Finally, in Kazakhstan, we have entered into a new long-term agreement with Silleno to supply nitrogen to their upcoming polyethylene facility. Through this EUR 70 million investment, we will own and operate to state-of-the-art energy-efficient nitrogen production units. This project consolidate our presence in this strategic industrial basis, allowing us to capture strong operational synergies and also support a key regional petrochemical hub. You have to keep in mind that these major large industries wins demonstrate our relevance and differentiation across a broad number of strategic and structural growth areas.

To conclude, on Slide 7, Air Liquide's performance in H1 demonstrate operational and strategic execution on all counts. First, our results show strong growth despite the challenging context along with great progress on our margin expansion road map. Also, our active M&A strategy continues. We were able to close our landmark DIG Airgas transaction ahead of schedule. We look forward now to the growth. This will continue to provide to the group.

Finally, backed by a record level of project signings, securing future growth, we are very well positioned to sustain our long-term growth profile. In a nutshell, I'd like to say that we are executing today and preparing for tomorrow. I thank you for your attention. I will now turn over to Jerome to detail the financials. Jérôme, please?

Thanks, Francois, and good morning, everyone. Turning to Page 9. I will now go through our financial performance in more detail. So for the second quarter of 2026, group sales delivered strong comparable growth at plus 5.2%, excluding nary pass-through and currency effects and including the scope effect from the DIG Airgas acquisition net of the biogas [indiscernible]. On a comparable basis, growth stood at plus 3.5%, landing above expectations and representing a strong pick up over our first quarter performance at plus 1.9%.

I will briefly call out Engineering & Technologies, reaching EUR 420 million in H1, up plus 4.6% on a comp basis and plus 8.8% in Q2. This increase is explained by the finalization of several unit construction for third-party customers in engineering and construction. So looking at the first half, overall, group established sales increased by plus 0.8%. Our reported top line was impacted by currency headwinds at minus 3.6%, which were only partially offset by the plus 0.1% positive energy impact.

Additionally, the strategic acquisition of DIG Airgas, net of our biogas divestiture contributing a positive scope effect at plus 1.7% during this period. Consequently, total comparable growth for the first half of the year ended a solid plus 2.6%.

So now moving to Page 10, showing all our regions are growing. In Americas growth remain at the same high level, same in Q1. And in Asia, we delivered sequential growth led by material pickup in activity. EMEA has also seen a modest increase in growth versus last quarter. From a business line standpoint, the growth increase in Q2 was driven by strong electronic sales and an improved industrial merchant performance.

Healthcare continued its steady contribution and line remained mixed. We have created, as you see a balanced portfolio across business lines and geographies that provide inherent operational resilience, proving again its value throughout every stage of market cycles. Let us now provide you with more granularity on the activity in our main geographies in Q2 2026.

I am on Page 11. Indeed, we sustained high growth in the Americas, plus 5% on a comp basis. Large industry sales in the Americas were again led by strong activity in the U.S. This increase was driven by contribution from new project start-ups and ramp-ups alongside high demand across our Gulf Coast pipeline network, especially from both chemical and refining customers in reaction to the development in the Middle East. In merchants, sales were driven by an increased pricing effect at plus 6.7%. Volume were slightly -- were up slightly excluding impacts of the global [ helium ] shortage.

Solid bulk gas activity was supported by a pickup in [indiscernible], notable for the space industry, while construction benefited from ongoing momentum in data center buildouts. Scale growth in the Americas continued at high level. And finally, electronics saw strong progression of advanced materials and specialty materials, offset by lower equipment and installation sales.

Sales in EMEA [indiscernible] supported by continued positive health care activity and an improved IM. In large industry, customer demand remained low, driven by weak content sales and low activity in the Middle East, partially offset by growing hydrogen to support robust activity in refining. Within merchant, our pricing action increased to plus 3.1%, demonstrating our ability to proactively counter growing inflationary pressures. Volumes were slightly up, excluding the impact of the global helium shortage.

Finally, Healthcare delivered sustained growth at plus 4%, supported by solid medical gas pricing and [ homes ] care activities. Activity in Asia now was boosted by a surge in electronics, further amplified by our DIG Airgas acquisition. In large industry, the activity remained mixed with hydrogen sales growth in Korea, not fully offsetting low activity in the regions. Q2 merchant sales grew at plus 2.1% up plus 3.4% when you exclude [indiscernible]. Pricing demonstrated a positive sequential trend improving from negative 0.4% in the first quarter to positive plus 1.4% in Q2. Notably, sales growth in China increased and in Q2, propelled by strong demand across on-site packaged gas and bulk gases by performance across the rest of Asia remain more mixed.

In Electronics, we delivered strong momentum and this performance was driven by the very strong demand for carrier gases and advanced materials alongside the rolloff of prior year equipment and installations copies.

Turning now to Page 12. I would like to give a quick update on our [indiscernible] operation in the Middle East. As you know, the region, of course, remained volatile. However, our local team is safe and doing an outstanding job to supply our customers and our assets remain fully intact and operational. The global [ EDM ] supply chain remains a point of attention. Production in Qatar has restarted a limited capacity, and we are utilizing -- sorry, road transport for our helium [indiscernible] container, which helps this global supply pressure. Of course, we are continuing to keep adapting to a fast-changing environment.

Future results have demonstrated, again, the resilience of the supply chain. We're effectively managing the situation to minimize the impact on both our customers and our financials. As for the potential outcomes, the last few months have proven us right and we expect the coming months to confirm this trend even more strongly.

I will now comment on our Q2 activity by business line. I am on Page 13. We are seeing an acceleration in merchant at plus 4%, with pricing strengthening to plus 5%. The negative delta is volume, which were attributed to the helium shortage. Excluding this impact, merchant volume increase, notably in construction and utility sector in the Americas fostered by digital infrastructure and data center development, technology in Asia and pharmaceutical in Europe.

In large industry, a record high volume in the U.S. are offsetting low [indiscernible] in Europe and soft demand in the Middle East, while activity in Asia remained mixed.

Turning to Page 14. Following the rolloff of challenging prior year equipment and installation comp year-over-year, growth in our electronics business has accelerated to plus 10% in Q2. The key drivers of this performance include, of course, [ carrier ] gas startup and ramp up, mainly in China and Taiwan alongside broad-based momentum in Advanced Materials. Top line results were boosted by one-off South Korean customer pulling Q3 order forward following the successful [indiscernible] IT merger of the company, DIG Airgas and Air Liquide Korea but even normalized for this, the underlying electronics cost is very robust, plus 8%, a truly excellent operational performance.

Finally, this year remained a consistent contributor to our growth this quarter. Performance in medical gases was anchored by our premium value-based commercial model, innovatice care -- in home care, sorry sustained growth in our patient base successfully offset the impact of strategic divestiture completed in Europe impacted the period.

Now moving on margin discussion, Page 15, as Francois highlighted earlier, our transformation initiatives are yielding structural benefits on our margin improvement levers of delivery. In the first half of the year at the group level, we delivered a plus 110 basis point expansion, excluding energy pass-through as well as the PPA impact of the DIG Airgas acquisition.

Keeping the PPI impact, the improvement remained very strong at plus 100 bps. [indiscernible] by our results will remain intensely focused on cost discipline with personnel costs down minus 1.6%, purchased minus 1.5% and other expense up plus 3% on a published basis, depreciation was up plus 3%, reflecting the start-up of our new production unit.

Let us now review our ongoing margin improvement plan execution in more detail. First turning to pricing in merchant, persistent inflationary pressure continue to do our pricing action with Q2 pricing reaching plus 5%. Our primary focus is on cost discipline and actively managing the price to cost spread to drive further margin expansion.

Second, efficiency reached a record high EUR 299 million, representing a plus 4% increase over the elevated baseline of last year. Those substantial gains were driven by the seamless execution of group transformation initiatives globally. Third, we continue to pursue active portfolio management. As a reminder, closing the Airgas early in Q1 give us the full year of benefits. Integration is moving sites, fast, creating even more value than we expect. Beyond this, we are pursuing disciplined bolt-on acquisition to drive local density while actively pruning our portfolio to ensure capital growth where it yields the highest return.

Moving on to review our P&L in more detail, I am on Page 17. Nonrecurring operating income and expense accounting for minus EUR 123 million in the first half of 2026 mainly due to costs related to the acquisition of DIG Airgas in South Korea and restructuring costs linked to our transformation plan.

Net financial costs stood at EUR 210 million for the first half of 2026. This includes a net debt cost of EUR 149 million, up 27% compared to the first half of 2025. This increase is very much primarily driven by the financing structure put in place for our DIG acquisition in South Korea this impact was partially offset by a reduction of the factoring cost with almost the end of factoring program in H1.

Our effective tax rates stand at 26.4%, higher than the 25% in H1 2025, mainly because of nondedicated costs linked to the DIG acquisition. Net profit is up plus 1.2% as published and plus 6.5% when you exclude the currency impact, the recurring net profit group share stood at EUR 1.9 billion, up plus 4.4% [indiscernible] and a very strong 10% on a constant currency basis.

On Page 18, now, our robust cash flow generation and strong balance sheet allowed us to finance dividend CapEx and also the DIG acquisition. Our net debt is at EUR 13.9 billion end of June 2026, marking a plus EUR 5.5 million increase from December 2025, following the financing of the DIG acquisition, the payment of EUR 2.2 billion in dividends is made, [ 1.8 billion ] of industry investment and the halting of the factoring programs, our gearing has thus increased to 45% adjusted for the dividend payment seasonality effect.

It is indeed worth mentioning that our working capital requirement increased by EUR 1.4 billion in the first half of 2026 compared to year-end 2025, but it is key to note that excluding factoring, the underlying operational increase was just EUR 0.4 billion. Indeed, our decision to help factoring program in H1 for cost effectiveness naturally added more than EUR 1 billion to trade receivables.

Next, let us now turn to Page 19, return on capital on to [indiscernible] stood at 11%, which is quite stable compared to the first half of 2025 despite the dilutive impact of the acceleration in investment.

Moving to Page 20, we'll now review our main investment KPI. We're at an all-time high industrial -- investment decision in H1 2026 at EUR 2.9 billion, up plus 26% year-over-year. These decisions include above EUR 1 billion of electronic carrier [indiscernible] that Francois discussed earlier as well as major large industry projects in U.S. Steel and Chemicals.

Our investment backlog reached an unprecedented EUR 6 billion, an increase of plus 30% year-over-year, very much and well balanced across electronics and large industry with strong regional and project diversity. While upcoming Q4 start-up will naturally draw down our backlog, a strong pipeline of new dealers will help to replenish it, giving us a strong and high visibility in our midterm growth.

Our 12 months portfolio investment opportunity reached EUR 4.8 billion, plus 17% higher year-over-year at the end of June 2026, despite a record EUR 2.9 billion of investment decision during the first half, that are, of course, moving into the backlog. That demonstrates the strong momentum we are seeing in new project development. The pipeline remains highly diversified, comprising nearly 80 distinct projects. Electronic has now emerged as the primary driver, accounting for approximately 50% of the portfolio.

The total portfolio of opportunities also including opportunities this time. Beyond 12 months, is stable and exceeds EUR 10 billion. So on Page 21, concluding the financial review, we confirm again our guidance for 2026 and 2027 accumulating has a plus 550 bps margin improvement over a 6-year period. Thank you very much for your attention. And I guess, we'll now begin the Q&A session.

[Operator Instructions]. We will now take our first question, and this is from Alex Sloane from Barclays.

Two from me, please. Firstly, around Helium. So Industrial Merchant delivered improved Q2 growth really helped by pricing and China recovery you've called out. I mean that looks like it's despite kind of a low single-digit helium related volume headwind in Europe and the Americas.

In your expectation for the H2 group growth to be similar or slightly better than H1, are you assuming a similar drag from helium availability? And should we be concerned this becomes a limiting factor on electronics growth? Are we still some ways off that given storage? And I guess more broadly, just thinking about your similar or slightly better comment on that second half outlook, would Q2 delivery adjusted for the order phasing in electronics be a broadly sustainable run rate for H2 expectations?

Thank you very much, Alex. So the first question on helium. As you know very well, I mean, the Qatar source was quite a significant source of helium globally for all the industry. On top of that, what we have seen in Q2 is some restriction coming from Russia for -- I mean, the products which was going to China, especially and some restrictions also coming out of China. So the market is -- was getting more tense, I would say.

On the positive news is that the production from Qatar has restarted at a reduced rate, but we have been able to secure some volume from this source. So that's, again, a very positive news. Our expectation is that this will continue and will limit basically the impact of helium on our sales for the second part of the year.

We have, of course, to be extremely cautious about the outlook for this part because we see that the situation is quite fluid even if what we see and what we hear is quite positive. As we speak, I mean, the helium production is still working and again, should contribute. That's, of course, on top of our existing infrastructure with the cavern that we are using very successfully and also the multiple other sources that we have today and that we have activated, again to limit overall the tedium impact for the second part of the year.

Speaking of the impact on Electronics customer, I think that was part of your question. Overall, we managed the supply of our electronics customers for helium. As you know, we have a long-term contract, and we have the capabilities to supply their requirement. So we have committed and we have been able to deliver the volume. So it's in no means a limitation to the business we are doing with the electronics for helium but also for the rest of the portfolio. So again, strong resilience of the group in spite of the adverse condition that we do expect to improve.

For the electronics itself, you have seen that clearly, there was an acceleration in the some quarter. This is a result of 2 things. The first one is we see less and less the impact of the very high E&I, equipment and installation sales that we had in the previous quarters which was, to some extent, masking the organic growth of electronic. That's one.

The second part is the fact that electronics is picking up and it's picking up because of the contribution of the investment that we have done previously for carrier gases and it's clearly, I mean, delivering. And also, that's a very positive news. The very strong sales that we have been enjoying for the advanced material, the proprietary molecules of [indiscernible] which is clearly picking up in the second quarter.

So we see that some customers are catching up a little bit with advanced purchase, so there may be a little bit of this effect on the advanced material. But all in all, we do expect electronics to remain in the range of 8%, maybe 9% for the rest of the year. Again, very strong electronics. It's a good news, and I think it's a good sign also that the investment and the position of the group is delivering.

We'll now take the next question. This is from Alejandro Vigil from Santander.

The first one is about your OpEx plan, the efficiencies. You have achieved EUR 300 million in the first half. If you can elaborate about the outlook for the coming quarters, particularly in EMEA, that probably the growth profile of this business -- this division is lower than the other divisions. And the second question is about the net debt. And you explained this factor in the first half, which are your expectations for the full year in terms of net debt? The evolution of net debt in the -- in the second half of the year, please?

Hello, thank you very much for your 2 questions. Jérôme?

Of course. Thank you very much. And so we'll go through your 2 questions. So as related to the efficiencies, you're right, the efficiency has been very strong in H1 to nearly EUR 300 million. It's plus 4% versus last year. Basically, this good transformation is multiple. We are continuing our transformation of the company as we have been doing in the last years. And when you look at the different buckets.

There is basically 3 different buckets that explain the acceleration of those efficiencies. First, there is an operational efficiencies. We are accelerating on the transformation of the industrial operation, the creation of the group industrial operation direction is happening, accelerating into the process and to the global utilization. We have multiple projects ongoing using more and more artificial intelligence to make our assets more effective.

So we are doing that, and we are entertaining a very good return as for now. And this, of course, will continue because we are very much at the right time, doing and accelerating on that. That's the first bucket. The second bucket is, of course, procurement. Procurement is delivering and it's continuing. We have a global procurement organization with -- has totally shifted in terms of gear, in terms of accelerating on those products with a strong acceleration in the deliveries.

And the last point is the restructuring impact and the efficiencies that also part of these efficiencies. So this continue to -- we continue to precipitate in the second part of the year, of course. Now to come back on the factory. So you're right, there is a factoring impact, which explains 1 -- a little bit more than EUR 1 billion, slightly and EUR 1.1 billion in the net debt, I would say, the next evolution during the first half year.

This is the [ disfactoring ] program comes from the long term at the period of the Airgas acquisition nearly 10 years ago. It was an optimization program at that time. but it's not anymore. When we saw the impact of the data costs that we pay for factoring and the receivables compared to our net debt cost, which is today at close to 3%. Clearly, it is not making sense to continue. It was a lack of optimization. And when you see already the impact during the first part of the year, you see that -- the cost of the debt has decreased by minus 7%.

When you exclude, of course, the one-off impact of the Airgas integration, the one-off cost that we have. But when you exclude that and [ complier ] compared to last year, we have a minus 7% of decrease in cost of financing, which is purely the impact of moving and to get out of this factor. So this is very good and a very strong optimization that our balance sheet can permit. So we have decided to do that was purely making sense on the cost-effectiveness can point.

Now the impact on H2 is quite easy. We have in the first part of the year, I would say, stopped those [indiscernible]. So you will have also the impact in the second part of the year, but the major part has been, we're just finalizing maybe a few hundreds of factoring remaining, but the biggest part has been already accounted for in the balance sheet in the first half of the year. That's it.

Thank you very much, Jérôme.

We'll now take our next question. This is from John Campbell, Bank of America.

Two quick questions, if I can. So if I look at your first half margin improvements, you delivered definitely on your 100 basis point target. I noticed perhaps with an unusually strong performance in the Americas, you've delivered over 200 basis points year-on-year. And I think you qualified that stating that it had some help from some sort of favorable exceptional item. It would be very helpful if you could elaborate on what exactly was that item and perhaps what was the quantum?

Second quick question. You've unveiled 3 major electronics projects basically in July alone. I guess the natural question is, how do you feel about the pipeline of future opportunities. I guess the implication from your 12-month opportunity set is you actually see sort of a larger opportunity than you said in Q1, but perhaps maybe elaborate on the regions where you see these biggest opportunities? And then maybe a very quick one as well. Should we consider maybe that the gas intensity of these new semiconductors is structurally higher. So should that support electronics volumes?

Thank you very much, John, for those very good questions. Margin, Jérôme, I will talk about the electronics projects.

Yes. Thank you very much, John, again, for your questions. So margin in Americas has increased significantly, you're right, plus 200 bps versus H1 '25 [indiscernible] energy. So basically, we have 2 or 3 big items. First, merchant large industry and health care activities contributed to the margin improvement through efficiencies and price increase, particularly in [indiscernible] and also efficiency also generated in electronics and a large industry benefited also some specific items that help. So that explains very much the bulk of these increases, as you said, is very significant in the Americas.

Thank you very much. So John, you're asking how do we feel about the electronics project, I would say, very good very, very good, actually, because we have a very strong position, a very strong footprint and an offer which is recognized, trusted by the leading customers. So we had, in fact, I mean, signed 1.5 all what we signed in 2025 for electronics already in the first part of the year. So very good momentum. You are asking region by region. Maybe we will start with the U.S., and I will ask Adam to say a few comments on what he sees in the U.S. on electronics project, and I'll come back to the rest of the world. Adam?

Yes. Thank you, Francois. And John, thanks for the question. So we've had a very productive quarter in the U.S. in terms of new project signings across the board, but particularly in electronics. As you've noted, we've signed 3 big new contracts for carrier gases. And we see that momentum continuing. So we have very active ongoing discussions with all of the major players in terms of expansions or new projects going on in the U.S. and feel like we're continuing to win our fair share of those projects and we see that continuing as the AI trends continue to go forward and expansions are continuing in the same way.

Maybe last point I would make is in terms of gas intensity. You're right, the gas intensity is higher when you look at these new fabs that are supporting advanced chips for high bandwidth memory or for the logic needed for AI. And this is just a benefit, I would say, from the technology portfolio that we have the efficient nitrogen generators that we have and across the entire fleet of what we do for carrier gas supply.

Thank you very much, Adam, for the rest of the world, it's mostly Asia where we are also very well positioned. So if we go through some of the key countries, we see again a very strong momentum. I would say Japan is waking up to some extent. We see that there is a very strong support from the government and the key players, investment there. We are the only global international gas company to be there. We had some successful signing there. and there may be more to come.

Taiwan is, of course, extremely dynamic, concentrating a lot of investment for the most advanced chips, especially. And there again, we are well positioned. Korea, of course, thanks to the DIG acquisition, now we are well positioned to meet the needs of the leading memory players, especially, you have seen tremendous announced by the key players with several new compasses, mega-campuses being announced.

You have seen that we have been successful in securing some of the existing business, and there is an acceleration in the requirement really raise for speed in this area. And finally, China, where we have a #1 position also for the electronics, which is a very, very dynamic in terms of needs for the semicon industry with a good development.

So when we combine all that, we see that there's a lot of green lights in this, thanks to our business model and what our customers are telling us. We are quite confident that -- this will continue for some time, again, meeting the needs of the digital world in general and more specifically the needs of AI, clearly. So good momentum and very good position on the --

[Operator Instructions]. The next question comes from Chetan Udeshi from JPMorgan.

Francois, you talked about Electronic growth continuing at the rate of maybe 8%, 9% in H2. And I'm just curious because when I look at the semiconductor CapEx increase that we are seeing this year and forecasted for next year, it's something close to 25%. Like what limits [indiscernible] from seeing that level of growth in your electronics business because I think Adam was referring to increasing content for gases in newer generation chips, I would have thought you should be growing at least in line with the CapEx growth is not even higher.

So why are we not seeing, of course, 89% growth is not bad, but I'm just curious why can't we see something similar to 25% growth that we see in the CapEx spending on semis today and probably also most likely next year based on the forecast. The second question, I was just intrigued by the very sort of high difference between the pricing increase in Americas in Q1, which was almost 7%. So in merchant whereas Europe was just around 3%. It seems volume momentum is not necessarily much different between the 2 regions. Both are of slightly excluding helium. So just curious what explains that pick gap in terms of pricing in Americas versus Europe and how sustainable that is, you think, overall.

Thank you very much, Chetan. So maybe we'll talk about the pricing first, and I will ask Adam to speak about what we see in the U.S. and what we see in Europe in terms of pricing. And then I'll come back to your interesting question on electronics for sure. Adam?

Yes. Thank you, Francois, and thanks Chetan. So when you look at pricing, and we've talked about this in other quarters, I really believe that what we have in Air Liquide is a very strong methodology, tools, systems, incentives in place to drive pricing in the right way. And what we want to do is take obviously into consideration the inflationary impacts that we see and make sure that what we are able to do is accretive to our margins. And I believe that this is across the board.

This is not just a U.S. approach. It's really a group-wide approach that Air Liquide has systematically put in place. And so obviously, the impacts of tariffs and the like, inflation can be somewhat regional in nature. And I think that also drives a difference in terms of the price impacts that exists 1 region to the next.

So definitely have a strong momentum in pricing in Industrial Merchant and in health care as well in the U.S. And I think it really just speaks to those tools and processes in place to continue that going forward. And I would expect that to continue in the same way in the future.

Thank you, Adam. And of course, it relates also to the inflation level and the cost increase, which maybe is higher in the U.S. and in Europe. Emilie, what do you think?

Yes, absolutely. Good morning, everyone. Pricing in Europe, I would say, in merchant and [indiscernible] is strong and has stepped up sequentially. So we've been proactive in increasing prices in anticipation of any cost increase due to the Middle East prices and due to inflation and inflationary pressure in general. And overall pricing was ahead of the cost curve, leading to a good pass-through, which is what we want.

So we've accelerated in Q2 in pricing in Europe. We have all the right formulas in bulk to reflect the energy piece. We know they are effective in PG. Also, we know the drill. We reacted fast, increasing the pricing to face the inflation, and it's different from one geography to the next. So overall, I'd say for Europe, we continue to have a very good dynamic in pricing management.

So to come back to your question, Chetan, on why don't we see in the last quarter, the growth of the electronics business, similar to the growth of the CapEx in electronics, being 25%. I think the main reason is we are not talking about the same thing at the same time, okay?

So what is being captured with the CapEx of the electronics in the semicon industry is investment in new fab. As a matter of fact, our growth in terms of investment for the new [ farm ] is not 25%, is 146% for the first semester because that's really what we invest more for this business. So we are much ahead of the industry, and that's also showing how successful we are in gaining market share and how well we are positioned.

So that's what we see today and what we need to look at is how much we invest. Today, 40% of our backlog is electronics. Almost 50% of our portfolio of projects in the next project that we can sign in the next 12 months is electronics. So that's really what we see, what we report in the quarter are the current sales, which reflect basically the production of the current fab. So it's normal. It's following the trend. It's growing but at the pace of the new investment.

So the new investment that we are doing here will contribute in 2, 3, 4 years, depending on the size. So be a little bit patient. You will see this, I mean, externally growing as the CapEx that we are putting on the ground is delivering product for the customer. I hope it's clear.

Just a lag between when your projects are signed and when you actually start to commence delivery.

Yes, again, I maybe repeat what I say here, you are talking about investment of the customer. Our investment is much higher. So of course, you need to see the plant online to see the sales. You get more of this on the CMD. So maybe we'll do one more time [indiscernible].

Next question is from Jean-Luc Romain from CIC CIB.

My question relates to hydrogen. My understanding is refiners in Europe would like to buy more [indiscernible] hydrogen, and you are building now new capacity like normally. Can you update us on the regulations and the EU regulations and the translation in French laws are very fast enough to start rapidly these production? Or are they still lagging behind the industrials?

Thank you very much for your question. I think, Emilie, who is a specialist of the European regulation on hydrogen can probably give you some answer. Emilie, please?

Okay. Well, [indiscernible] in terms of the need for green hydrogen in Europe, we continue to see a good momentum. So you mentioned our electrolyzer in normal. So in terms of what is in the backlog in terms of electrolyzers, it's projects under execution and everything is growing as per the plan. Remember, our electrolyzer in normalcy will start up this year and is fully loaded. So in terms of regulation, things are moving.

[ Rev3 ] regulation in Europe is being transposed step-by-step in all the different countries. Of course, this is as the mandates defined by the regulation being transposed in the different countries is what triggers the -- such an interest for green hydrogen from our refiners and our customers. And overall, I would say, again, going as per the plan, we have several execution, and we are clearly the player in green hydrogen in Europe, with also our strong technological partnership with Siemens Energy to manufacture those [indiscernible].

Thank you very much, Emilie. And overall, we see that the regulation is going in the right direction. There are more actually refiner and sites being converted to low carbon hydrogen. So again, I think the leadership position that we have taken in Europe is paying off. So thank you very much, Emilie.

[Operator Instructions]. We'll now take the next question. This is from James Hooper from Bernstein.

First question is around the backlog. Are we approaching peak backlog at the moment. In the management report, you called start-up so far in 2026, relatively limited. So I guess, from Q4 with [ Normandy ] and others that you'd expect some of these projects to start coming out. But are you expecting win rates there for elsewhere in the business to cover for some.

And then secondly, also on projects. We've seen the press and others show some very, very large numbers in the -- about semiconductor investments that you've referenced, Francois. But the Air Liquide projects that you've signed have been kind of low hundred million of CapEx. Is this -- is this -- do you think the size of projects is going to increase over time? Or is there anything strategically where you prefer executing on smaller projects. I think some of the press have linked your competitors to much larger electronics contracts, for example.

James, thank you very much for your 2 good questions. Regarding the backlog, I think as you pointed out, I mean, project comment goes, so there are some significant projects that will come out in Q3 and Q4. So that will decrease the backlog. But all in all, given, I mean, the pace of the new project, we do expect this to remain more or less flat. We have to be careful with the backlog from 1 quarter to another one. What is very important is to look at the pipeline of the project I think the key message is very, very strong today, probably the highest in the history of the group.

So we are not worried about, I would say, quarter-by-quarter variation of the backlog. Again, very strong trend and good pipeline of projects to be signed soon. Regarding what you mentioned about the electronic, I think it's a very good point. And you see that in what we showed, there is -- there are several projects, which are what we would call today midsized, large-size project. It's not the extra large projects.

First, related very much in terms of the diversification of the opportunities and the risk the global footprint, the synergy we can find the selectivity we can use on those different projects and the fact that we can also support our customers wherever they are. So we like the portfolio of projects.

Again, I think in the current environment, it's probably making a project more resilient and probably to some extent, also more profitable. This being said, we see that there is an acceleration of the very, very large projects. So we may, in the future, position ourselves on some of those very large projects.

Again, if they make sense, if they are a strategic for us, if we can find the right profitability. One thing that I did not mention, of course, is that in this environment, this gives us the opportunity to pick what we consider the best project where we can create most of the value for the group and for reality. So we do expect some larger projects even to come online. And maybe we will pick up some of those.

We have no further questions at this time. So I will now hand back to the CEO for closing remarks. Thank you.

All right. Thank you very much. I think this concludes our session today. Thank you very much for all your questions. I would like maybe to wrap up with some words. We, I believe, clearly delivered another very strong performance in this first half.

While -- and I think it's very important, positioning ourselves for future growth through key project wins. In spite of the environment, we clearly stay the course. Thank you again for your attention. I look forward to seeing all of you at our virtual Capital Markets Day on October. In the meantime, I wish all of you an enjoyable summer break, if you take one. Thank you very much. Please take care.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. Speakers, please stand by.

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.