Intervention de Benoît Potier, Président - Directeur Général d'Air Liquide

Hello everyone. It's a pleasure to reunite with all our shareholders, those physically present here and those joining via the internet. It's been quite some time since we wanted to re-engage this dialogue with shareholders. As you know, what matters most to us is this closeness and listening to the expectations of our shareholders. We must also say today that the world after will be quite different from the world before. It's very important that during these transition phases, we stay in close contact with all shareholders. That's why this day is particularly important for us.

Yes, it is indeed a very industrial model, deeply integrated into the economy. Regarding 2020, it was a year where we proved the resilience of our model. What does that mean? It means we have markets and clients who continued to consume, and we positioned ourselves across all these market elements, which include both sectors and countries. With the diversity of the group, we managed to keep our heads above water. There was also the exceptional contribution of our group to the COVID crisis, illustrated last year by two major initiatives. The first, which had a lot of impact in France, was the construction in record time—45 days—of 10,000 ventilators, as simple as possible but adapted for COVID, achieved in partnership. The second phase, which unfortunately continues, is the supply of liquid oxygen to hospitals in various countries through exceptional mobilization of resources. We used French Navy boats to ship products to India and returned our containers with the Indian Air Force to recharge them in Qatar. We did this for India, Tunisia, Morocco, Chile, the Caribbean, and several other regions. So, 2020 showed an extremely solid business model and exceptional operations to bring Air Liquide's contribution to the world.

What's interesting is looking at the contrasts. You mentioned the United States, but volumes have actually returned in Europe, which is good news. Europe has performed well across all sectors. America is in a recovery phase, but its growth rate is still slightly lower than in Europe. Asia-Pacific continues to perform well, especially in electronics, though there is a strong semiconductor shortage. For us, activities grew 10% in the third quarter, after growing 6% last year. Europe is doing well in volume, America is recovering strongly, Asia continues to turn well, though China is slightly less powerful than before. The Middle East and Africa are seeing strong growth due to new unit startups. Perspectives remain very good for the coming months.

Absolutely, inflation is quite strong on average, but in some sectors, it's much higher. There's also a changing relationship with work, leading to higher employee turnover—people leaving the labor market or switching companies. Turnover at Air Liquide is still low, but higher than usual. We are managing many phenomena during this recovery phase, and we are well-equipped to face them.

You've given the answer. Organic growth is important because it provides the foundation and strength of a company. We relate it to global industrial production or the GDP of different countries. The group always grows at 'GDP plus a bit.' Statistically, it's even been a multiplier of industrial production plus inflation. This model is harder to model than before, but it remains the core. External growth brings new capabilities, as with Airgas in the US, which gave us a national position. We also do small 'bolt-ons' to enrich the portfolio, while large acquisitions are rarer. But what's very interesting now is that new markets are opening up. We traditionally serve heavy industry like steel and chemicals, but process industries like cement must now reduce CO2 emissions and may become Air Liquide customers. These new markets will play a role.

Yes, of course. Our objectives, announced last March, focused on three points: reducing CO2 emissions as fast as possible, focusing on 'hard-to-abate' sectors. We are signing many contracts, like with BASF and the European Innovation Fund to capture CO2 in the Port of Antwerp, liquefy it, and sequester it. This is crucial for the next 15 years. The second axis is 'Care'—health—where we have much to do post-COVID. The 'T' stands for 'Trust'—acting with the confidence of all stakeholders. ACT is the foundation of our program.

With over 20 billion euros in revenue, we invest about 3.5 billion annually. Examples include the Antwerp project and the Normandy project, where we will take over a Total hydrogen unit, connect it to the local network, and work with industrialists to collect and sequester CO2. Phase 2 will involve building renewable-based hydrogen production units to 'green' the hydrogen. We envision transporting this green hydrogen to Paris via the Seine. This represents investments of several hundred million euros.

It's a subject that fascinates the world. We estimate hydrogen can take 20% of energy demand by 2050. With a 13 trillion dollar energy market, that's 2.6 trillion—26 times the current industrial gas market. Our 2035 milestone is to triple hydrogen sales and invest 8 billion. We are already operating a 20 MW electrolyzer in Canada, and the Normandy project will involve 100 MW units. We'll see these technologies arrive on the market by 2030. We are agnostic on low-carbon energy, using both renewables and nuclear, and we have industrial pilots for 95% CO2 capture from hydrocarbons.

Yes, it's obvious. We had to mobilize on incredible scales—we did 10 times more in the same time or the same thing 10 times faster. The partnership for ventilators was set up in a week; we couldn't have done it alone. Partnerships are a solution for major transitions. We will do more to help clients find decarbonization solutions, accelerating innovation within Air Liquide.

That's a very good thing. We grew from 420,000 to 470,000 shareholders. The COVID period of reflection on global issues led to a strengthening of shareholder engagement. It's in our DNA. We also focused on youth; surveys show 38% of young people aged 25-40 who didn't own shares are now considering it. Our shareholder service works to modernize tools and make entering the stock market economically efficient and easy via the internet.

Some companies have three; we have about 25. We have a physical space at headquarters where shareholders feel at home, though COVID forced us to close it temporarily.

Thank you very much. I will pass this to Patrick, the director of the shareholder service. We work hard to make communication easy and friendly, and the company must remain high-performing to deliver the profitability shareholders value.

Patrick will note this. There are technical aspects—costs and optimization—and family strategy questions. Often, the lack of preparation leads notaries to sell shares to pay inheritance taxes. Preparing a portfolio exit is important, and our shareholder service can help you navigate the PEA framework.

I understand the framework is what it is. I won't commit today, but the shareholder service can provide specific information.

The question is relevant. There's strong interference between geopolitics and economics. In China, our industrial merchant business is stable. Healthcare is slower due to state control. For heavy industry, international clients, who we know well, outweigh Chinese clients. In electronics, China wants semiconductor factories, and while we have the skills, we are very vigilant about investment choices to avoid long-term mistakes.

You're right; primary energy is the real issue. Green hydrogen will primarily come from renewables, though they are intermittent and location-dependent. We are also 'agnostic' on nuclear, including Small Modular Reactors (SMRs). We already capture 95% of CO2 from classic processes. For storage, we use salt caverns like those for natural gas. We are looking at other vectors like ammonia and methanol. Air Liquide focuses on production, packaging, and distribution, often all the way to usage, like in hydrogen stations.

You see there's no shortage of subjects. We are very active, even more so than before COVID. I hope our next meeting will be in person. The link isn't broken, and we look forward to continuing to develop the group with all our shareholders.