Air Liquide: A Masterclass in Resilience and Long-Term Growth

In an era of economic uncertainty and shifting global priorities, Air Liquide stands out as a rare combination of industrial resilience and visionary foresight. With a record €4.6 billion investment backlog for the first half of 2025, the French industrial gas giant is not just surviving—it's thriving. By strategically allocating capital across energy transition and industrial gas demand, Air Liquide is positioning itself as a cornerstone of the low-carbon future while maintaining robust profitability. Let's break down why this company is a must-watch for investors seeking long-term value.

A €4.6 Billion Bet on the Future

Air Liquide's investment backlog is a testament to its confidence in the global energy transition. Of the €4.6 billion, 40%—nearly €1.8 billion—is directed toward hydrogen and carbon capture projects, including the 200 MW Normand'Hy PEM electrolyzer and partnerships like TEAL Mobility with TotalEnergies. These aren't just feel-good projects; they're foundational to meeting the company's goal of tripling hydrogen sales to €6 billion by 2035. The remaining 33%—€1.5 billion—is poured into semiconductor manufacturing, where demand for ultra-pure gases is surging due to the AI revolution. This dual focus on decarbonization and high-growth tech ensures Air Liquide isn't just riding one megatrend but dominating two.

Pricing Power in a Price-Sensitive World

What makes Air Liquide's strategy even more compelling is its dynamic pricing model. While many industrial companies struggle with margin compression, Air Liquide has managed to boost its operating margin by 100 basis points in the first half of 2025 alone. This is no accident. The company's ADVANCE 2025 plan emphasizes proactive pricing adjustments, supported by efficiency gains and a willingness to pass on rising input costs. For example, its hydrogen projects command premium pricing due to their role in helping clients meet decarbonization targets—a value proposition that's hard to quantify but easy to monetize.

A Diversified Pipeline for Resilience

Beyond the immediate backlog, Air Liquide has a €4.1 billion pipeline of new opportunities, spanning geographies from the U.S. to Germany and the Netherlands. This diversification is critical in a world where regional economic shocks are inevitable. Consider the ELYgator project in the Netherlands, a 200 MW electrolyzer backed by government incentives, or its joint venture with TotalEnergies to build a 250 MW electrolyzer. These projects aren't just about scale—they're about securing a dominant position in the hydrogen value chain, where Air Liquide's 50+ years of expertise give it a head start over competitors.

Innovation as a Growth Engine

Air Liquide isn't resting on its laurels. With €300 million annually spent on innovation—half of which targets energy transition and digital tools—it's continuously refining its offerings. From low-carbon industrial gas solutions to AI-driven process optimization, the company is future-proofing its business. This R&D edge is particularly valuable in sectors like electronics, where the demand for specialized gases is expected to grow at a double-digit rate through 2030.

Financial Fortitude in a Volatile World

Even as it invests aggressively, Air Liquide maintains a strong balance sheet. Its €8 billion hydrogen investment plan by 2035 is backed by a disciplined approach to capital allocation, ensuring that returns stay above 10% ROCE. The company's ability to balance growth with profitability is a rarity in capital-intensive industries, and it's reflected in its recurring operating income (OIR) margin, which is on track to expand by 200 basis points by 2026.

Why This Matters to Investors

For long-term investors, Air Liquide offers a rare combination of growth, resilience, and strategic clarity. Its €4.6 billion backlog isn't just a number—it's a roadmap for capturing value in two of the most transformative sectors of the 21st century: clean energy and advanced manufacturing. With a diversified footprint, pricing discipline, and a pipeline of projects that align with global decarbonization goals, the company is uniquely positioned to outperform even in a down market.

Final Takeaway

Air Liquide isn't just adapting to the energy transition—it's leading it. For investors who want to capitalize on the shift to low-carbon technologies without sacrificing returns, this is a stock worth watching. The company's ability to balance bold investments with margin resilience is a masterclass in industrial strategy, and its €10+ billion investment pipeline ensures the growth story is far from over. In a world where certainty is elusive, Air Liquide offers a compelling case for confidence.