Linde Plc · NASDAQ:LIN
Linde — Praxair — Q4 2014 Earnings Presentation
25 slides from Linde's earnings presentation, Jan 28, 2015
Slide 1: Investor Teleconference Presentation Fourth Quarter 2014
Investor Teleconference Presentation Fourth Quarter 2014 Praxair, Inc. January 28, 2015
Slide 2: Forward Looking Statement
Forward Looking Statement This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and un
Slide 3: Full Year Results
Full Year Results YOY Adj Adj. ($ MM) ∆% Sales Growth + 3% 2014(1) 2013(1) Volume + 3% Sales $12,273 $11,925 3% Price + 2% Operating Profit $2,746 $2,657 3% Cost pass-thru -- Operating Margin 22.4% 22.3% + 10bp Currency - 3% Acq/Div + 1% EBITDA(1) $3,958 $3,804 4% EBITDA Margin(1) 32.2% 31.9% + 30bp
Slide 4: Strong Operating Cash Flow in 2014
Strong Operating Cash Flow in 2014 Record Free Cash Flow $1.2B Uses of Cash Growth $1.8B $2.9B Capex $1.7B Acquisitions $0.1B, net Returned to Shareholders $1.5B Dividends $0.75B – Dividend +10% 1Q15 $1.7B – 22nd consecutive annual increase $1.2 Net share repurchases $0.75B – Share count red
Slide 5: Fourth Quarter Results
Fourth Quarter Results YOY Q4 vs. Q3 Adj Fourth Third Adj Fourth Sales Growth - 1% - 5% ($ MM) Quarter Quarter Quarter 2014(1) 2014 2013(1) Volume + 2% - 2% Sales $2,990 $3,144 $3,010 Price + 1% -- Cost pass-thru -- -- Operating Profit $663 $711 $690 Currency - 4% - 3% Operating Margin 22.2% 22.6% 2
Slide 6: North America
North America U.S. merchant volumes +4% YoY Fourth Third Fourth ($ MM) Quarter Quarter Quarter Customer outages impacted onsite 2014 2014 2013 volumes YoY and Seq Sales $1,589 $1,639 $1,567 North America packaged gas volumes +2% YoY Segment OP $388 $416 $393 End-market growth in manufacturin
Slide 7: Europe
Europe Fourth Third Fourth Spain volume growth ($ MM) Quarter Quarter Quarter Weaker volumes Northern Europe 2014 2014 2013 Price attainment in most countries Sales $356 $385 $404 sequentially Segment OP $63 $71 $75 Operating Margin 17.7% 18.4% 18.6% 2015 Outlook YOY Q4 vs. Q3 Price attainme
Slide 8: South America
South America Volume outperformance again vs Fourth Third Fourth Brazil -5% industrial production ($ MM) Quarter Quarter Quarter 2014 2014 2013 End-market growth in food & beverage Sales $473 $523 $481 and healthcare Robust operating margin due to Segment OP $105 $118 $115 strong price and cos
Slide 9: Asia
Asia Fourth Third Fourth India volume growth up 14% YoY, includes ($ MM) Quarter Quarter Quarter project start-ups for energy and metals 2014 2014 2013 China base business growth modest Sales $407 $426 $394 Korea organic sales growth +12% YoY, including project start-ups Segment OP $77 $75 $80
Slide 10: Surface Technologies
Surface Technologies Fourth Third Fourth Organic sales growth up 1% YoY, ($ MM) Quarter Quarter Quarter primarily due to pricing, volumes 2014 2014 2013 comparable with prior year Sales $165 $171 $164 Aviation coatings growth Segment OP $30 $31 $27 Operating Margin 18.2% 18.1% 16.5% January 28,
Slide 11: 2015 Guidance
2015 Guidance Sales (% YoY) Operating Profit EPS +4% to +7%, + 5% to 11%, ~1% (1%) ex-FX ex-FX 1-2% > Operating Profit 3-5% (6%) (2%) > Sales to +1% 2014 Volume Price Acq Pass- FX 2015 Price 1-2% fewer shares ‒ Base thru Productivity ‒ Projects Cost Control First Quarter 2015 Full Year 2015
Slide 12: Solid Praxair Results Regardless of FX Cycle
Solid Praxair Results Regardless of FX Cycle Sales Variance YoY from Currency more Operating Cash Flow Index than EPS Index 4x 3x Currency 4% 4% 3% 3% 3% 2% 2% 2% -2% -2% -3% -3% -4% -4% -5% -6% 2000 2002 2004 2006 2008 2010 2012 2014 Growing EPS and Operating Cash Flow Non-GAAP EPS measure January
Slide 13: Appendix
Appendix January 28, 2015 13
Slide 14: Disciplined Capital Allocation Yields Strong Shareholder Returns
Disciplined Capital Allocation Yields Strong Shareholder Returns 22-year Consecutive Net Share Repurchases Dividend Increase ($B) Diluted Outstanding Shares Cumulative $2.86 1.0 10% Share Count Dividends $6+B $0.9 Reduction 0.9 0.8 $0.7 $0.8 $2.00 0.7 0.6 Dividend per share 0.5 0.4 $0.72 0.3 0.2 $0.
Slide 15: Currency Rate Changes
Currency Rate Changes % of Praxair 13% 12% 8% 6% 3% 3% 2014 Sales Brazilian Euro Canadian Mexican Indian Korean Real Dollar Peso Rupee Won 0% -1% -2% -3% -4% -5% -6% -7% -8% -9% -10% -11% -12% 4Q14 change 2014 full-year change Significant movement In addition, the impact of the Venezuela currency de
Slide 16: Organic Growth Trends
Organic Growth Trends PX Sales Variance YOY 10% 5% 0% -5% -10% -15% 2008 2009 2010 2011 2012 2013 2014 Organic Growth* Weighted IP** Organic growth consistently outperforms industrial production *Organic growth = price + volume January 28, 2015 ** Weighted IP based on PX sales revenues by country, 1
Slide 17: Organic Growth by Segment
Organic Growth by Segment North America South America 10% 15% 5% 10% 0% 5% -5% 0% -10% -5% -15% -10% 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 Organic Growth Weighted IP Organic Growth Weighted IP Europe Asia 10% 25% 5% 20% 0% 15% -5% 10% -10% -15% 5% -20% 0% 2008 2009 20
Slide 18: Backlog - $1.9B Capital
Backlog - $ 1.9B Capital KuibyshevAzot JV Evraz NTMK 1,400 TPD ASU 3,000 TPD ASU Yankuang Guohong (2016) (2015) 3,000 TPD ASU (2015) Taewoong Steel 180 TPD ASU Antwerp (2016) 1,300 TPD ASU North West Redwater (2016) 2,000 TPD ASU (2017) Jinling Huntsman 900 TPD ASU (2016) CSP 2,400 TPD ASU JSW Bella
Slide 19: Global End-Market Trends
Global End-Market Trends 4Q14 Sales Growth* % of Sales YOY Vs. 3Q14 Manufacturing (24%) + 3% - 3% YoY growth in Americas; Seq South America YoY growth in North America and start-ups in Metals (17%) + 4% + 1% Asia Energy (14%) - 1% + 1% YoY North America customer outages Chemicals (10%) - 1% - 1% Eur
Slide 20: Non-GAAP Measures ($MM)
Non-GAAP Measures ($MM) The following non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s financial leverage, return on capital and ope
Slide 21: Non-GAAP Measures, continued
Non-GAAP Measures, continued 2014 2013 2012 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Return on Praxair, Inc. Shareholders' Equity (ROE) - Return on Praxair, Inc. shareholders' equity is a measure used by investors, financial analysts and management to evaluate operating performance from a Praxair shareho
Slide 22: Non-GAAP Measures, continued
Non-GAAP Measures, continued The following table presents adjusted amounts for Operating Profit and Operating Profit Margin, Interest Expense - net, Income Taxes, Effective Tax Rate, Noncontrolling Interests, Net income - Praxair, Inc., and Diluted EPS for the periods presented. Additionally, this t
Slide 23: Non-GAAP Measures, continued
Non-GAAP Measures, continued Fourth Fourth Third First Third Year Quarter Year Quarter Quarter Quarter Quarter 2014 2014 2013 2013 2013 2013 2012 Adjusted Noncontrolling interests Reported noncontrolling interests $ (52) $ (11) $ 81 $ 33 $ 17 $ 15 $ 10 Less: Income tax benefit - - (16) (16) - - - Ad
Slide 24: Sustainable Development Aligned with Business Strategy
Sustainable Development Aligned with Business Strategy Business Drivers Economic Environmental Social Safety Record 5X ENERGY 2X GHG benefit better than vs. total GHG emissions U.S. industry average $3 Billion ENVIRONMENT revenue from Eco-Portfolio >50 million EMERGING ECONOMIES people served with s
Slide 25: For further information, please contact:
For further information, please contact: INVESTOR RELATIONS Phone: (203) 837-2118 Kelcey_Hoyt@praxair.com www.praxair.com/investors 2015 Reporting Calendar First Quarter April 29, 2015 Second Quarter July 29, 2015 Third Quarter October 28, 2015 January 28, 2015 25