L'Air Liquide S.A. (AI) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Air Liquide Q3 2022 Revenue Conference Call. Today's conference is being recorded, [Operator Instructions] I will now hand over to Aude Rodriguez. Please begin your meeting, and I will be standing by. Thank you.

Good morning, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you very much for being with us today. Francois Jackow; and Jerome Pelletan will present the third quarter revenue. For the Q&A session, they will be joined on the phone from Houston by Mike Graff; Pascal Vinet, Senior VP in charge of the Europe industries hub and the Africa Middle East hub is in the room with us in Paris. In the agenda, our next announcement is on February 16 next year for our full year 2022 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 share our continued strong performance in the third quarter of 2022. Once again, our business model demonstrated its resilience to a challenging environment, and in Q3, we delivered a performance that is even stronger than in the first half. In particular, for the 4 KPIs that you can see on the slide, we achieved a strong comparable sales growth of 8%, a record high 18% pricing in Industrial Merchant effectively managing the increasing inflation, a high cash flow generation close to 24% of sales, and on top of this, the project activity remains strong as reflected in the EUR 1.1 billion of investment decision, which positions us very well for future growth. This will thanks to the outstanding fighting spirit and discipline of our teams worldwide, thanks also to a business model balance for both resilience and growth, and this was, needless to say, despite a very challenging environment. Let's revisit a major strength of Air Liquide, especially in the current environment, which is the resilience of the business model. First, over the last few quarters, this model has demonstrated its ability to address soaring energy prices and the overall high inflation. Indeed, if we take large industries, the surge of energy prices mostly seen in Europe has been entirely passed through to customers, thanks to our strong contractual clauses. Let's keep in mind that we are talking here about more than EUR 1.4 billion of energy impact in Q3 coming at 90% from Europe. This is in 1 quarter more than 80% of the total energy impact for the full year 2021. Also in Industrial Merchant, we have been successfully managing pricing to address the unprecedented spike in energy costs and high inflation. And this was done through indexation formulas and surcharges in the bulk business and through positive price campaigns that we continue to launch in several countries and also through targeted actions in the packaged gas activities. This ability to pass through cost is one aspect of the resilience of our business model. But also, secondly, as you know, resilience has always been a trademark of Air Liquide. Also thanks to, first, a strong business model underpinned by long-term contracts, take-or-pay closes, plus fixed revenues from rentals. You know all that. But also resilience is due to a high diversity of business reach in terms of geographies, activities and market and customer. The fact that we were able to deliver 8% sales growth this quarter I think is a clear demonstration of this. Resilience is also thanks to finally a very robust financial structure and balance sheet, with an A category credit rating and low exposure to variable interest rate with close to 90% of our debt structured at fixed rates, which is quite important in the current environment. As we said before, ADVANCE is also reinforcing this resilience by first positioning Air Liquide in growth markets, namely energy transition, electronics, health care, all of which exhibit strong fundamental drivers. And secondly, by focusing the entire organization on performance. And really, I mean, performance as illustrated by our strong results on pricing, cost containment and portfolio management. Now if I move to the next slide, Slide 5. As I mentioned, our model is balanced for both resilience and growth. Our backlog has increased again in Q3 to a high level of EUR 3.4 billion. It consists of projects which will start up over the next 2 to 3 years, fueling future growth. Projects to supply our customers in the semicon industry represent a significant share of the backlog. To give you an idea, more than EUR 2.5 billion of investments were approved in electronics over the last 4 years. These projects are now coming online and ramping up. The energy transition is another strong growth driver. We have already been very successful in convincing customers that Air Liquide has a key role to play in decarbonizing manufacturing industry, thanks to our products and to our technologies. Six significant projects have already been selected for European or national subsidies for a total gross CapEx of around EUR 1.5 billion. This is a very strong start, and this is very well aligned with our ADVANCE objective. We are talking here about carbon capture projects, blue hydrogen production and large-sized electrolyzers. And this is for Europe. But there is more to come with the incentive of the new Inflation Reduction Act announced in the U.S. last August. Let's not forget Air Liquide is the #1 industrial gas company in the U.S., thanks to our positions in large industries, industrial merchant and electronics. So we are very well placed to capture these new opportunities in the U.S. In conclusion, based on the strong performance of the first half and Q3, and of course, assuming no systemic crash of the global economy, looking forward, we are confident we will outperform on all our criteria, our advanced trajectory for this first year of the plan. Let me stop here and give the floor to Jerome to provide more details on our performance in the third quarter. Jerome?

Thanks, Francois, and good morning, everyone. Turning now to Q3 sales. As detailed on Slide 7, group sales have been again very strong on a comparable basis, that is excluding the energy pass-through impact, ForEx and significant scope effect. Gas & Services sales for Q3 showed a strong plus 7.2% increase versus last year, similar to our growth in Q2 which was plus 7.3%. Engineering & Construction sales have increased by plus 37% in Q3 compared to last year. Order intake has continued to ramp up to reach EUR 695 million year-to-date. Global Markets & Technology have seen a very dynamic activity with plus 33% comparable growth boosted again by our biogas business. So overall, group sales are up plus 8.3% on a comparable basis for Q3, while published sales are up very significantly at plus 41%, supported by the record impact of the spike in energy price during the quarter. This translates into a plus 24% energy pass-through effect in our LI activity for the quarter with all positive ForEx effect of plus 8.8% and the limited significant scope effect at minus 0.2%. Let's now review the activity for each of our main geographies. I'm now on Page 8. After strong Q2, Americas accelerated in Q3 with sales up plus 13%. Large industry volume has been strong in the U.S. Gulf Coast, driven by air gases with start-up and ramp-up contribution in chemicals, this despite lower demand in steel. Hydrogen sales were solidly supported by ramp-up contribution in LatAm balancing a few turnarounds in the U.S. In merchants, sales are again up significantly. Our pricing power is confirmed with an increase of plus 16% versus last year, aligned with rising inflation. From a volume standpoint, gases and hardgoods followed end market trends and grew by plus 2%, excluding helium, which is impacting by the shortage in global supply. Healthcare activity has been solid despite lower medical oxygen volume compared to a strong comparator last year due to COVID. In the U.S., sales in medical oxygen and proximity care were supported by price increases. Finally, in LatAm, both our home healthcare and made-for-cable gases activities are increased. In Electronics, sales were very dynamic contribution from carrier gas, equipment and installation and specialty materials. In Europe, sales have been stable in Q3 in the context of conflict in Ukraine, coupled with exceptionally high energy prices. Large Industries have seen slowing demand in steel and chemicals. In hydrogen, some refineries are running lighter crude slates resulting in lower hydrogen consumption. In the context of soaring energy prices, the difference between comparable sales growth and volume evolution, which is limited to minus 6%, is due to calculation effect of the energy impact. Indeed, for large industry, the method value of the energy impact of the year on the basis of the volume of the preceding year, times the difference of energy prices. Consequently, in the third quarter, the rise of energy prices been exceptionally strong and volume slightly down, the energy impact is amplified, as well as a combined effect, which reduced comparable sales of large industries. In Merchant, the spike in energy costs and overall inflation has again been very successfully mitigated with a record pricing effect increasing by plus 30%. Sales have grown in all end markets included food, materials and fabrication and energy. Volume increased slightly by plus 1.4%, excluding helium showing against strong resilience, particularly in packaged gases. Finally, healthcare sales have remained very robust, contributing to the resilience of our sales in Europe, thanks to strong home healthcare, notably thanks to diabetes, boosted by volume as well as an acquisition in Poland. Medical oxygen sales are down compared to last year high comparative due to COVID despite increased pricing. Turning to Page 9. In Asia, sales have progressed strongly at plus 11% in Q3 benefited again from the strong growth, notably in electronics. In Large Industries, sales increased, in particular, in China with strong air gases partially due to favorable miller effect with the dual energy control last year, balancing a softer rest of Asia. In Merchant, sales have increased in all countries and pricing increased at a record plus 9%. APAC volume declined slightly but is improving. Sales were high in packaged gases in China where we are successfully pursuing our bolt-on acquisition integration program. Electronics sales were buoyant at plus 22% growth. Recurring sales, excluding E&I were also very high, plus 22%, driven by very strong carrier gases with contribution from the start-up and ramp-up of several units. Specialty and Advanced Materials sales were very strong also across the region. Finally, Equipment & Installation sales are booming, especially with our key customers. To finish, in Africa Middle East, sales were slightly negative in Q3. Large industry sales was up, supported by strong sales in India and in Egypt. Sales in Merchant were negative following small divestiture in the Middle East despite good pricing at plus 7%, while health care followed normalizing demand in medical gases after the COVID impact last year. I will now comment on our Q3 activity by business line. I am now on Page 10. In Merchant, we achieved record pricing and volume has been resilient. Pricing has continued to accelerate in our geographies to reach plus 18% overall in Q3 to counter the unprecedented spike in energy and other costs, showing again our ability to rapidly implement pricing campaign that could quickly recover this cost. Volume resilience, especially in the U.S. and Europe, although hampered by the helium shortage as some helium volume have been shifted to serve electronics long-term contract. By end market, food and beverage, materials and energy markets were strong whilst automotive showed improvement. For our Large Industries, activity has been more mixed. Comparable sales shows minus 10% in the third quarter mainly due to the calculation and effect of the energy impact I mentioned earlier when outlining the Large Industry performance in Europe. Excluding this exceptional effect in Europe, overall volumes were down only minus 2%. Americas and China have been solid with robust air gases volume from chemicals, especially in the U.S. Gulf Coast that benefit from start-up and ramp-up. Europe has seen slowing demand in all key sectors, as chemicals, steel and hydrogen. We saw a solid contribution from start-up and ramp-up. Page 11. Electronics and electronics momentum is very strong in all segments. Indeed, momentum is strong in all segments with over plus 20% growth in carrier gases, Specialty Materials and Advanced Materials, mainly in Asia. This growth is supported by significant contribution from start-up and ramp-up, as well as strong pricing effect at plus 8% mainly in Specialty Materials and for helium. Finally, in Healthcare home healthcare was strong while we see positive pricing in medical gases. In Q3, indeed, we see strong resilience of the -- in the healthcare business despite a high comparable -- comparative, sorry, last year due to COVID-19. Sales were driven by stronger healthcare. Indeed, home healthcare growth continued to be strongly supported by diabetes. Specialty ingredients were also strong. Pricing has improved and is positive in all regions. On Slide 12, as I just mentioned, sales increased sharply both in the Americas and in Asia. From a business line standpoint, sales were boosted by both electronics and industrial merchant reflecting again the strength of Air Liquide's very well balanced and resilient footprint, both in terms of geography and activity. I also want to highlight the strong sales growth in health care despite lower medical oxygen sales compared to 2021 due to COVID as an illustration of the outstanding resilience for our business. Our performance improvement is again supported by our structured plan that continue to deliver. I am now on Page 13. As you can see, IM pricing has significantly increased, again in all regions at fast and indeed historic pace. I will come back to this in more detail in the next slide. We have also ramped up our efficiency in Q3 to reach EUR 260 million year-to-date despite the significant adverse effect of inflation on our procurement reduction effort. As you know, avoided costs are not reported in efficiencies but were significant against this quarter. Those will also contribute to the performance for the year. Portfolio management has continued. We executed 4 divestitures and closed 12 bolt-on acquisitions over the last 3 quarters with our continued focus on profitable and margin accretive opportunities. Performance improvement is our key focus area, and we continue to work on all possible levers to achieve this. As you can see on Page 14, our pricing actions in merchants have been very powerful in every geography, and we achieved a plus 18% overall in Q3, following an increase of plus 14% in Q2. The pricing campaign have again been executed in a very rapid and efficient way with record impact, mainly in bulk and packaged gases, leveraging on our escalation formula, surcharges and pricing actions to counter inflation and passthrough the spike in energy costs. In Q3 alone, Europe achieved a plus 30% year-on-year pricing impact a historical landmark with pricing, particularly strong in bulk, while the Americas delivered plus 16% and with a notable sequence increase in Asia at plus 9%, mainly in China year-on-year. On Page 15, the 12 months portfolio of opportunities remain at a very high level of EUR 3 billion. And despite this despite the high level of investment decision for the quarter supported by both energy transition projects, above 40% and a good proportion of electronic project. Our industrial and financial decision for the quarter remained both appropriately selective but also very strong at EUR 1.1 billion. Notably, we decided on a very significant project for a large electronic -- leading electronic customer in Taiwan. Finally, our investment backlog is still very solid and very high at EUR 3.4 billion, thanks to the high level of investment decision this quarter, representing EUR 1.3 billion of additional annual sales after full ramp-up. I am now on Page 16. We achieved EUR 288 million sales contribution from startup and ramp up during the last 3 quarters. We can also reconfirm that we expect to reach a full year startup and ramp up contribution to sales between EUR 400 million and EUR 425 million, including about EUR 135 million from our Sasol separation unit acquisition and excluding the Russian project for EUR 10 million that are no longer consolidated since September 1, 2022. To conclude, the sales growth we achieved in Q3 and our continued focus on performance improvement, made us very confident in reconfirming our guidance for the year. To be more precise, we are confident in our ability to deliver margin improvement in a similar way to what we delivered in H1. Thank you very much for your attention, and we'll now open the Q&A session.

[Operator Instructions] The first question comes from the line of Alex Jones of Bank of America.

I'll ask 2, if I can. The first on cash flow. Cash flow growth was particularly strong this quarter and has been up more than 20% in the 9 months so far. Can you help us understand if there are any special things going on in cash flow that means we shouldn't read that across to profitability? And if there are, can you help us think about sort of profitability in the second half of the year? And then second question on oxy combustion, you mentioned in the release that you've gone ahead with 1 project for a customer in glass in Industrial Merchant. Could you help us size that opportunity as you go forward and more customers potentially sign those contracts? And could there be any short-term effect on merchant volumes as you maybe ship a bit more oxygen to customers who are generally trying to improve their energy efficiency in the current environment?

I will ask Jerome to talk about the cash flow. And probably, Pascal will talk about the oxy commission since we see really a boom in this project in Europe.

Alex, you're totally right, and cash flow is particularly strong. It's at about 23.8% cash flow to sales, excluding energy. And it's rising by nearly 24% as published and plus 16% if we exclude the ForEx. So slight significant improvement. I would say that it's reflecting the performance improvement plan that we are talking all the time. And the fact that we are basically trying to improve at every in performance plan, pricing efficiency, portfolio management that's resulting into the cash flow. So nothing more to say, but just to mention that, again, we are very happy with the level of cash flow, and it is a clear resulting, I would say, result of all the actions that we have set up for now in the world.

Pascal?

Alex, oxy combustion in the glass business is not completely new, but we see a lot more opportunities right now, especially in Europe, many more than in previous years. Why? Because many of our customers are trying to have their processes adapted to be more efficient, consume less energy, and we also reduce CO2 emissions. Now to your question, this is a midsized type of opportunity. It's typically around 100 tonnes per day of oxygen. This is typically also an IM contract and not an LI contract. But again, good opportunity for us. A lot of possibilities that we see growing right now.

The next question comes from the line of Alex Stewart of Barclays.

Just 1 question around this European Large Industries adjustment. I understand, and I follow the maths that you've kind of put in the presentation. Can I ask how it compares with the second quarter? Because European Large Industries was down 10% comparable in Q2. You are now saying volumes are down 6%, but down 28% or 27% in comparable terms. So how can we compare Q2 with Q3? Is it correct to look at the minus 10% last quarter and the minus 6% this quarter? Or perhaps you can help us give us sort of like-for-like comparison. And then also, if you wouldn't mind, and you have to hand telling us what the gas and services comparable revenue growth would have been overall without this technical adjustment. It would be really helpful to have those numbers.

Alex, I will ask Jerome to clarify some of those numbers. Jerome?

Alex, this extraordinary effect is due to a very high level of increasing in energy price in Europe, nearly 10x what we had last year for the period and with slight decrease in volume. So that's why we decided to comment on this combined effect, which is, again, a very, very significant. At normal time it's neglectable. So that's why it was important to show the volume on this. To be more precise, on Q3, the impact on the group comparable growth is around minus 10%. That's the impact. And for Q2, it was more -- yes, minus 3%. And for minus, it was minus 1% in Q2. Much less significant.

So Jerome, just to be clear because -- so can you repeat the numbers to make sure?

Minus 3% on group comparable growth in Q3. So minus 3% is the impact of the combined effect, and it was minus 1% in Q2.

Sorry, just to be clear, is that for the Gas & Services division overall, or was that for European Large Industries, the minus 3 percentage points and then minus 1 percentage points there?

Minus 3% group impact and minus 1% in Q2. That's the figure. Minus 3% of group comparable growth in Q3 group level, minus 1% in Q2.

And how could we compare the Q2 and Q3 Large Industries Europe results? That's the other part of the question. It would be helpful.

I don't think we have this just right available, but we can follow up on that. Again, it was far less in Q2. And as I think explained before, in the quarter before that, it was really negligible and not seen at the group perimeter.

The next question comes Gunther Zechmann from Bernstein.

Gunther Zechmann at Bernstein. A couple of questions, one on guidance and one on trading. The trading one, could you just talk us through the demand trends that you've seen during the quarter? And also heading into October? And the second question on guidance, please, can I just clarify if the margin expansion part of the guidance includes the negative combined effect? And to that extent, whether we should still be thinking about 50 to 70 basis points operating margin improvement, including this effect, please.

Let's talk a little bit about the business trends and maybe go through the geography. So I will ask Mike to comment on the Americas and Pascal to comment on Europe, and I will finish up by making some comments on Asia. Mike, do you want to give us what we see in the Americas?

Gunther, I think a couple of things. In the Americas, obviously, in the quarter for Large Industries, we saw strong air gas volumes, as Jerome talked about. We've had strong new start-ups contributions in the chemical sector. Hydrogen sales were actually strong across the Americas, but we did have a number of customers with turnarounds as well. And I think in terms of the actual trends themselves that are going to impact us as we go into the fourth quarter, we've seen some customers that have shifted production from the Gulf -- to the Gulf Coast from Europe given the high energy costs. We also see the demand for exports out of the Gulf Coast to Asia soften a bit. But primarily, what we see is maybe some softening in steel and methanol. But overall, we still see very strong year-over-year growth in volume. So we really we really continue to see strength overall, some softening here and there. But the trends themselves continue to be good. In the air gas markets, clearly, looking at the revenues for the quarter, you saw the strength. What you don't see fully because, as Jerome mentioned, the gas volume growth from the industrial side is a bit clouded given the fact that we have the helium impact overall. But also especially looking at the air gas business, we see an effect of nitrogen services associated with Hurricane Ida last year that we don't see this year. So we saw strong volumes in the overall business last year. As a result, if we look specifically at the industrial markets for air gas, we actually see a lot of strength in the quarter and continuing into the fourth quarter. To give you a sense, we talked about hardgoods volumes for all the industrial markets growing quarter-to-quarter. And if you look at those specific to the third quarter and continuing today, they're up about 7% on a year-over-year basis. And now gas is catching up and the gas volumes into those markets are strong as well, growing over 4%. So the trends that we see specifically there are clearly driven by a lot of investment we see in metal fabrication and also in manufacturing. A lot of strength. We see a strong demand for construction equipment for commercial vehicles and trailers. Automotive continues to be strong. The construction market in the U.S. for nonresidential construction all of the comparators, all the indices are kind of at all-time highs. You see a lot of strength, for example, in construction given the fact with the energy transition, there's already 30 EV battery plants that have been announced and recognize the top 10 of those account for about $25 billion in spend. You've got 16 fab-related investments associated with new fabs or the expansion of existing fabs. There's 100 billion in new LNG projects, and we haven't even begun to see the real impact of the bipartisan infrastructure bill that will probably begin to see in the fourth quarter and certainly well in the next year. So I think from a construction standpoint, that's really strong. And then if I look at the trends in electronics, whether that's in the U.S. or that's globally, there's a lot of underlying strength in electronics overall. I think we've heard a bit about -- especially in the memory market, a bit of softening given the rapid ramp-up that we saw with COVID. But overall, we still see very, very strong dynamics underlying for electronics overall. And you can see the investment profile for electronics continuing to be strong everywhere in the world, whether that's Asia, the U.S. or now in Europe, especially given the incentives we see in Europe as well as in the U.S. So that continues to be strong. And I think from a health care standpoint in the Americas, while we certainly saw the decline in volumes associated with COVID. We see a lot of strength in a lot of the proximity care markets and home healthcare and continued growth in medical gas sales as well.

Pascal, do you want to speak a little bit about Europe?

Yes, so maybe I'll start with Large Industries in Europe. We had quite very resilient volumes in a context, as you know, of extremely high energy prices were multiplied by 10 or maybe even more than 10 at the peak during the summer. So volumes were down minus 6% as you saw, quite a moderate drop. Most of this drop being in the HyCO business. This was visible mostly in the chemical sector. For air gases, the situation was more contrasted with lower volumes in the steel sector, but compensated by higher volumes in the refining activity. Maybe 1 more thing. The very good news is that the fear that we had a few months ago, you had a few months ago, the fear about significant energy curtailments has pretty much disappeared. If energy prices, in particular, natural gas stabilized for a while, I think down from the summer peak as it is right now. This would be very good news for many of our Large Industries customers. In IM, as you saw, IM has done very well in this context of increasing inflation in Europe and very high energy prices since we have passed through all of that in our sales. That's why we have sales for IM in Europe at plus 30%. This is again, almost fully coming from pricing, but with very resilient volumes, actually slightly up, as Jerome mentioned. It has been a fairly solid performance in all sectors, not only the teams have done an excellent job with pricing, and it's all about execution when it comes to pricing. But volumes have stayed well oriented. In particular, we have seen positive volumes in cylinders and very good sales growth in the food, the fabrication, the material sector across most countries in Europe. So far, I could say that the background economic environment that is important for IM has remained quite solid. Quick word maybe on healthcare. Healthcare has also done fairly well in Q3 and in Europe with a solid 5.8% growth. This is driven by the home healthcare activity that has remained very strong, led by the diabetes part, while the hospital business is still comparing with high COVID base last year. To be noted, the Specialty Ingredient business was also quite strong.

I will finish up with a few words on Asia and really focusing on 2 topics. The first one is electronics. As mentioned by Mike, it's very strong for Asia. It's above 20% growth in the last quarter. We see a lot of growth of the current business installation, all the way from the carrier gases to the advanced materials, specialty chemicals and so on. This is true in Singapore, in Taiwan, in Korea, in China also. So Mike made the comments about some softening in memory business, but overall, we see that not significantly impacting the trend that we are seeing today. Still a lot of expansion. I was myself in Asia last week, and I could see that. The second point I'd like to mention is China of course because we had some questions, that concerned about China at the beginning of the year. Between the COVID, drought, and also to some extent the real estate crisis, but if we look at the performance in Q3, it's much better than what we have seen in Q2. It's basically double the comparable sales that we have seen in Q2. So in Q3, we are above the 10% for China. Electronics being very strong, reflecting all the efforts made in China for cheap production for clear. Clearly, Large Industry we benefited from some comparison effect versus last year now with the dual energy control. But we see, I mean, volume, which are holding well. In IM, we see strong pricing. Again, this is not something that we have seen in the past in China, but clearly, we see a strong pricing in the 4% to 5% range. With also a volume increase driven by our strategy, which is based on organic growth and also bolt-on acquisitions that we are completing in China. So I think, clearly, there has been a catch-up of China. This momentum was confirmed lately in September, and we do expect this positive momentum to continue and to be confirmed in Q4. So I will stop here for the different trends. And maybe briefly, Jerome, do you want to comment on the margin?

Yes, very quickly, thank you. Gunther, in fact, there is no change in the methodology in the calculation of either comparable growth of operating income recurring margin, excluding the energy impact. That's very clear. Now on the guidance, we confirm our guidance, and we see that confident to deliver margin improvement in a similar way that what we deliver in H1. And as you see, we did plus 50 basis points in H1. So I guess it's very nice. You were able to make the calculation for the full year.

The next question comes from the line of Andrew Stott of UBS.

I have 2 questions. Maybe one for Francois to start with. The order book has moved up sequentially 400 million in Q3. I wonder if you could just walk through the main components of that order book improvement. And I think the second one is probably one for Jerome. You've called out helium a lot during the presentation. Is it genuinely material to the group in Q3, both volume and price? And sort of related to the same issue. When do you see resolution of availability of helium?

Andrew, regarding the order book, what we see is clearly, I mean, a stronger order book and backlog overall. What we see is basically something that we like because we see a strong, good, profitable and strategic projects in large industries mostly around the energy transition. So here, we talk about blue hydrogen production, we talk about green hydrogen production. We talk about carbon capture, but also some oxy-combustion application. So that's really, I mean, the bulk of what we see in large industry. These are components which is getting stronger is the electronics as mentioned by Mike, given, I mean, the activity in terms of investment in all the region of the world. We see a very strong demand for carrier gases for projects which are confirmed, which are also quite large sized projects. So those are basically the 2 main components of the order book that we have. Jerome?