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

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 Jerome, who will assist you through the presentation. Jerome?

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 [indiscernible] 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 3.3 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 build 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 2 to 3x. Second, margin improvement. We have a clear line of sight to deliver 400 to 600 basis points of OR 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, Emilie 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 center 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 enable 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 Jerome 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 Vision 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 give us the means to grow. Listing 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. Jerome 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. [Presentation]

As you saw in the video, Air Liquide is a trusted long term partner, an organization with whom our customers reliably grow. By [indiscernible] technical experts with [indiscernible] performance and data bases, 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 and [indiscernible] cooling and safety systems as well as secondary electronics supply networks. These are a few examples of how we intent to get more from the base. Moving onto to our next social growth key groth market. We are excited to give you a better understanding of these underlying drivers [indiscernible] market. Let us begin with a video on the key growth market for us, electronics, to showcase in particular our capabilities in advanced materials. 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 responsibility has to be the first step of the process. Now let's step into we grow so we can see how 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 help 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 and the 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, Marcelo. You're absolutely right. Let's dig a little deeper. [indiscernible] grow, we showcase our 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 customer perspective. [Presentation]

As you saw in this video, Air Liquide is a trusted long terms partner, an organization with whole our customers reliably grow. By telling our technical experts with [indiscernible] performance data bases 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 illustrate, 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 sheet makers. In carrier gas, we have developed our own advanced technology over the years and scale 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 key. 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 Gases 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, Harmen. 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]

This special growth market is [indiscernible], 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 [indiscernible] market. Our energy transition pipeline is moving from strategy to [indiscernible] 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 closes. 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 constraint, 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 [indiscernible] 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 safe 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 in 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-defense ] 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 health care, 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 [ carbon ] 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 health care 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, health care 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 health care 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 advanced 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, 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 software 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 [ Sara ] 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 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 health care frames. 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 Jerome. Jerome, would you take us through the financial platform that serves as a springboard for Beyond?

Of course, [ Joel ], 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 is margin improvement, has generated over 600 basis points of OR 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 IR 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, Jerome. 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 flexing 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, Jerome. 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 OR 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.

Jerome, 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, Joel, 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, Joel, let me spend some time on explaining our financial model to address your question, which is again very important. As you will see, absolute OR 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 IR 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, OR 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 OR 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, [ ISU ], 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 OR on sales. And therefore, you know OR 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 higher 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 OR 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 OR to sell is so much higher without energy pass-through. So the main point again is that sales may not reflect the company's growth and OR 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, market -- 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 OR 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?

Thank you, Joel, 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 advanced 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, Jerome. And now I'll turn it back to Francois for his closing remarks.

Thank you, Joel. 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 Joel, if you can read the first question, please.

I sure can. Before I start, a quick reminder written. First question, regarding the M&A strategy, it's clear that bolt-ons will be focused in the coming years. Given the EUR 22 billion to EUR 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 health care, mostly, but also potentially strategic larger acquisitions like the one we have done in Korea with DIG. Of course, too dense, 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 health care margins versus peers given Air Liquide's greater home health care and service content? What would a truly like-for-like comparison look like?

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

Thank you. I was really hoping you would ask that question. So to be clear, our home health care 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 health care in the United States, we are even better prepared and better positioned than our competitors and our peers. 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.

Two questions. The first is for Diana. Your health care 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. home care market, which is currently up for sale? My second question is to Jerome. 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 healthcare 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 healthcare again. In home healthcare, 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 industry, 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 industry because indeed, it's quite different. Adam?

Yes, absolutely. So in talking about the U.S., I think there's three key points from a large industry 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 Airgas 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 two projects that we announced at the beginning of the year, one in the chemical space with [ Axa ], 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 industry 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. Europe?

So large industry 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, Ron. So overall, we see that in Large Industry, 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 two 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 Matthieu, 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 back 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 Jerome and probably the next one for Arnold. Jerome...

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 very much, Jerome. 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 two 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.