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Rating action

Scope Ratings GmbH (Scope) has today affirmed the A issuer rating of Air Liquide SA and revised the Outlook to Stable from Positive. The Outlook revision is mainly driven by Scope’s expectation of higher leverage, largely tied to the DIG acquisition, which limits the potential rating upside previously observed. Debt category ratings (short-term debt: S-1; senior unsecured debt: A) have been affirmed.

The rating action also incorporates the correction of errors made in the calculation of Scope-adjusted EBITDA*, funds from operations, free operating cash flow (FOCF) and debt. Scope reviewed the ratings and concluded that the corrections of those calculation errors had no impact on the ratings.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: A+ (unchanged). Air Liquide’s credit quality is supported by its leading position in the industrial gas market, a diversified revenue base across regions and sectors, and consistently solid and stable profit margins.

Air Liquide benefits from a strong position in the global industrial gas market, achieved through many decades of expansion and some key strategic acquisitions. The company operates over 10,000 kilometres of pipelines, along with numerous on-site and local production facilities concentrated in major industrial clusters. This cluster-based setup allows the company to optimise operations, manage costs efficiently, and reliably supply large volumes of gases. The combination of scale, early-mover advantage, and strategic positioning provides a robust foundation that is difficult for competitors to replicate, in Scope’s view.

The company has a well-balanced and diversified footprint, with roughly 40% of revenue from the Americas, 35% from Europe, 20% from APAC, and 4% from the Middle East and Africa. Its industrial gas portfolio is supported by a flexible and integrated delivery network, enabling reliable service to a wide range of customers. Sales are well distributed across sectors, with an estimated share of cyclical industries of around 55% of revenue. Furthermore, the company serves millions of customers and works with a broad supplier base, minimising concentration and supply chain risks. The largest customer accounts for just over 2% of sales.

Profitability is on an upwards trend, with Scope-adjusted EBITDA margins rising to 28% in 2024, up from 24% in 2022, and Scope-adjusted ROCE* improving to around 19%. This trend reflects a combination of lower energy costs (pass-through) and cost-efficiency measures. Take-or-pay clauses, inflation indexation, and a diversified customer base help maintain margin stability. Although profitability remains subject to external factors such as energy prices, ongoing efficiency initiatives are expected to contribute to gradual margin improvement through 2026.

Financial risk profile: A- (unchanged). Air Liquide’s credit metrics remain solid, even after accounting for the expected impact of the DIG acquisition. However, the A- FRP continues to constrain the credit profile. Scope estimates pro-forma leverage (Scope-adjusted debt/EBITDA) would range 1.7-1.8x in 2026-27E, coupled with a broadly unchanged picture on interest cover (around 17x) and cash flow cover (upper-teens % range). Liquidity remains adequate, with ample access to committed undrawn credit lines and a well-diversified funding strategy.

Leverage remains manageable, although the DIG acquisition will reduce the buffer that Air Liquide enjoyed since 2023, in Scope’s view. The agency expects debt/EBITDA to rise to about 1.8x on a pro-forma basis (from around 1.5x) once the debt funding is fully reflected. Organic EBITDA growth of roughly 3% per year and a small margin improvement are expected to support only marginal deleveraging through 2027. Overall, the leverage profile remains consistent with a strong credit profile, albeit with less headroom relative to recent years.

Interest coverage remains very strong thanks to resilient EBITDA and the company’s largely fixed-rate funding structure. About 88% of debt was fixed at the end of 2024, and Scope expects this share to stay around 90% going forward. Nevertheless, the larger gross debt balance post-acquisition should still cause a modest decline in coverage ratios to about 17x, versus 18-20x recently. Scope forecasts a slight increase in average funding cost as older, cheaper debt matures, although it does not expect this to materially affect the ratio due to projected EBITDA growth.

Cash flow cover – as measured by free operating cash flow (FOCF)/debt – has been broadly stable, and Scope expects it to temporarily fall to 15% after the DIG acquisition, before recovering towards the upper teens range. Projected EBITDA growth should comfortably outweigh the higher capex requirements over the forecast horizon. Overall, the metric shows little volatility, reflecting steady earnings and predictable spending.

Liquidity: adequate (unchanged). Air Liquide’s credit profile is supported by ample liquidity and broad access to capital markets. As of June 2025, the company held EUR 1.6bn in cash, alongside EUR 4bn in undrawn credit facilities. Scope forecasts over EUR 2bn in FOCF annually, which combined with cash and available facilities, should comfortably cover debt maturities of EUR 1.3bn during 2026 and EUR 1bn during 2027.

Additionally, Air Liquide benefits from a diversified funding strategy and strong relationships with more than 20 international banks. The company regularly issues bonds in multiple currencies and tenors of up to 12 years, including offerings in both U.S. public and private markets.

Supplementary rating drivers: credit-neutral (unchanged). The rating has no adjustments related to financial policy, peer group considerations, parent support, or governance and structure. Nonetheless, Scope acknowledges Air Liquide’s prudent financial policy, particularly its public commitment to an "A range” credit rating.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that debt/EBITDA will range 1.5-2.0x after the announced DIG acquisition is completed, while rising capex and shareholder distributions are supported by continued EBITDA growth.

The upside scenario for the rating and Outlook is:

1. Debt/EBITDA below 1.5x on a sustained basis, while maintaining an unchanged strong business risk profile

The downside scenarios for the rating and Outlook are (collectively):

1. Debt/EBITDA above 2.0x on a sustained basis
    
2. Deteriorating business risk profile, e.g. through sustained pressure on operating profitability

Debt ratings

The rated debt is issued by Air Liquide Finance SA and Air Liquide US LLC. Senior unsecured bonds display standard bond documentation, including pari passu and negative pledge. Following the affirmation of the underlying issuer rating, Scope has also affirmed the rating for senior unsecured debt at A.

The short-term debt rating has been affirmed at S-1, which is based on the underlying A/Stable issuer rating and the company’s consistently robust liquidity, as well as its strong access to external funding from banks and debt capital markets.

Environmental, social and governance (ESG) factors

While Scope notes that chemicals companies are naturally exposed to environmental and social controversies and could face litigation risk, it has not identified company-specific ESG factors at this stage that would have a credit impact.

All rating actions and rated entities

Air Liquide SA

Issuer rating: A/Stable, Outlook change

Short-term debt rating: S-1, affirmation

Senior unsecured debt rating: A, affirmation

Air Liquide Finance SA

Issuer rating: A/Stable, Outlook change

Short-term debt rating: S-1, affirmation

Senior unsecured debt rating: A, affirmation

Air Liquide US LLC

Issuer rating: A/Stable, Outlook change

Short-term debt rating: S-1, affirmation

*All credit metrics refer to Scope-adjusted figures. Scope-adjusted ROCE defined as per Scope’s latest Chemical Ratings Methodology

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025; Chemicals Rating Methodology, 30 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting these Credit Ratings originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Mikel Zabala, Associate Director
Person responsible for approval of the Credit Ratings: Sebastian Zank, Managing Director
The Credit Ratings/Outlook assigned to Air Liquide SA and Air Liquide Finance SA were first released by Scope Ratings on 9 July 2020. The Credit Ratings/Outlook were last updated on 2 May 2024.
The Credit Ratings/Outlook assigned to Air Liquide US LLC were first released by Scope Ratings on 2 August 2024.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use / exclusion of liability
© 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.