Electronics momentum building, waiting for the LI inflection

Research evidence excerpt

Electronics momentum building, waiting for the LI inflection

Barclays | Air Liquide

somewhat more balanced regionally. We now model full-year margin improvement of c.+100bp

ex-energy, with stronger growth assumptions offset by a slightly more cautious margin phasing.

This results in a modest reduction to our FY26 EBIT (-0.5%) and EPS (-0.3%) forecasts.

Electronics remains the key structural attraction: The most significant incremental takeaway

from the call was management's confidence in the longevity of Electronics growth. Electronics

investment decisions exceeded €1bn in H1, roughly 1.5x total FY25 levels, and management

made clear that almost all recent awards are directly linked to AI-driven semiconductor

investment. Importantly, the €6.0bn backlog and €4.8bn opportunity set continue to replenish

despite record project awards, with Electronics now representing roughly 50% of both.

Management also highlighted that next-generation AI memory and logic fabs are becoming

increasingly gas intensive. While these investments take several years to convert into revenue,

they create a growing embedded demand pipeline that should support attractive medium-term

growth. We continue to view Air Liquide as one of the highest-quality picks-and-shovels

beneficiaries of global AI capex.

H1 likely represents peak net debt: Net debt increased to €13.9bn, reflecting the DIG Airgas

acquisition, dividends and elevated investment spending. However, management clarified that

over €1bn of the working capital outflow related to the termination of a legacy factoring

programme. The associated benefit is already visible, with financing costs excluding DIG down

around 7% year-on-year in H1. With the factoring impact now absorbed and DIG and dividend