Industrial Gas Margins by Company

Energy Moves the Percentage, Not the Profit

An industrial gas margin moves with energy prices even when profit does not. On-site contracts let the supplier bill its customer for changes in the cost of power and natural gas, so energy runs through revenue and cost of sales in equal amounts. When power gets dearer, revenue rises, profit stays where it was and the margin falls. A table of gases margins therefore ranks two things before it ranks management: how much of each company’s revenue is energy billed on at cost, and how its supply splits between on-site plants, bulk deliveries and cylinders.

Two measures carry the comparison: EBITDA margin, and operating margin, which is struck after depreciation, a large cost in an industry of long-lived plants. No two of the four majors define either measure the same way, so each figure below stays on its company’s own basis. The business models guide explains the three supply modes.

Four Filers, Each on Its Own Basis

Ranked by headline operating margin. Sources: Linde and Air Products FY2025 10-Ks, Air Liquide’s 2025 annual results, Nippon Sanso’s results for the year to 31 March 2026. Adjusted, recurring and core measures remove items each company treats as outside its running business; Linde’s also removes the extra depreciation and amortisation from revaluing Linde AG’s assets in their 2018 merger. Air Products’ 10-K prints adjusted EBITDA of $5,076.4M, not the percentage, so 42.2% is that figure over sales of $12,037.3M. Air Liquide’s 30.2% is its income statement line for operating income recurring before depreciation and amortisation, €8,145.1M, over revenue. The last column is that line’s contribution to the year’s change in sales; Nippon Sanso’s includes surcharges.

What Sits Between the Two Margins

In the table, Air Products leads Linde on EBITDA margin and trails it on operating margin. Two items explain it.

The first is income from joint ventures. Air Products counts its share of equity affiliates’ profit in adjusted EBITDA: $654.5M in FY2025, or 5.4 points of its margin. That income never appears in operating income. Linde’s equivalent was $228M, 0.7% of sales. Strip it out of both and Linde leads on EBITDA too, 38.6% to 36.7%.

The second is depreciation. Air Products charged $1,564.2M, 13.0% of sales; Linde’s adjusted depreciation was 8.8%. Air Products takes 51% of its sales from on-site plants, built at or beside a customer’s site and paid for over a 15-to-20-year contract, so more of each dollar of revenue goes to recovering the cost of the plant. Linde takes 24% from on-site and 35% from cylinders. Supply mix shows most clearly in the gap between the two margins.

The two IFRS filers add a third wrinkle. Air Liquide and Nippon Sanso put lease costs into depreciation, while US accounting keeps operating lease costs above EBITDA at Linde and Air Products. That lifts an IFRS pre-depreciation margin against a US one, by an amount the headline figures do not show.

Statutory margins need a separate warning. Air Products’ FY2025 GAAP operating margin was negative because of $3,747.0M of charges it labels business and asset actions, worth 31.1 points of sales. A year earlier its GAAP margin was 36.9%, lifted by a $1,575.6M gain on selling its LNG business. Neither figure describes the running business, which is why the headline column uses each company’s adjusted measure.

One Plant, Three Energy Prices

Take a fictional on-site plant. It sells $100M a year, of which $40M is energy billed on to the customer at cost, and earns $30M of EBITDA. Then the energy price moves.

Nothing about the plant changed: the customer pays the energy bill and the profit is the same, yet the reported margin spans 16 points. The last column is the fix: restate revenue at last year’s energy price and the margin holds at 30.0%. Air Liquide publishes its margin this way.

How Each Filing Shows the Pass-Through

All four put a pass-through line in the bridge that explains the year’s change in sales. Only two say what it did to the margin.

Linde calls it “cost pass-through”, which its 10-K defines as the contractual billing of energy cost variances, mainly to on-site customers. The line was flat in 2025, so look at years when energy prices swung. In 2022 pass-through added 6% to Linde’s sales and in 2023 it took 3% off, each time “with minimal impact on operating profit”. Its adjusted EBITDA margin rose from 32.6% in 2022 to 36.9% in 2023. Had the lost 3% of sales stayed in, the 2023 margin would have been about 35.8%. So roughly a quarter of the 4.3-point rise came from energy leaving the revenue line. Higher pricing also added 6% to sales that year.

Air Products quantifies the effect. Energy cost pass-through added 2% to its FY2025 sales and $278M to cost of sales. Its 10-K attributes 50 bps of the 70 bps fall in its adjusted operating margin to that pass-through, and 100 bps of a 150 bps fall in its Americas segment margin, where pass-through added 4% to sales. The filing says it plainly: cost pass-through results in declining margins.

Air Liquide goes furthest. Its “energy impact” is the share of sales indexed to energy prices multiplied by the change in the average price, and it is stripped out of comparable growth. In 2025 it added €235M to revenue, 0.8%. The published operating margin, operating income recurring over revenue, rose 80 bps to 20.7%; measured at 2024 energy prices it rose 100 bps to 20.9%.

Nippon Sanso reports “Pass-through & Surcharge” as one line, which took 0.9 points off revenue growth of 3.9% in the year to March 2026. Because surcharges are mixed in, the energy share cannot be separated, and the company does not state a margin effect.

What the Table Does Not Tell You

It is not a ranking of how well each company is run. The figures differ in adjustments, joint-venture income, lease accounting and year end.

Each group margin also blends businesses that are not gases. Linde’s includes an engineering business that earned an 18.1% operating margin on $2,250M of sales in 2025. Air Liquide’s includes Healthcare and Electronics. Equipment and installation made up 43% of revenue in Nippon Sanso’s Japan segment in the year to March 2026.

Read a change in any of these margins against the pass-through line before reading it as a change in the business. At Air Liquide energy hid part of the 2025 improvement; at Air Products it caused most of the FY2025 fall.