Linde Plc · NASDAQ:LIN
Linde — 9M 2009 Earnings Presentation
25 slides from Linde's earnings presentation, Nov 2, 2009
Slide 1: January – September 2009 Conference Call
January – September 2009 Conference Call Georg Denoke, CFO 2 November 2009
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Linde AG (“Linde”) and their respective subsidiaries and businesses. These include, without limitation, those concerning the strategy of an integrated group, future growth potential of markets and products, profitability in speci
Slide 3: Highlights
Highlights 9M Group key figures Group sales of € 8.313 bn (-11.5%), Group operating profit of € 1.741 bn (-8.8%) Group operating profit before restructuring charges down 4.7% Reported EPS of € 2.47 (9M 08: € 3.29), adjusted EPS of € 3.38 (9M 08: € 4.14) Ongoing strong cash flow generation: 9.5% incr
Slide 4: Group, sales by Divisions
Group, sales by Divisions Group sales down 11.5%, Gases sales further stabilising in € million, 9M 2008 9M 2009 as reported 9,392 Gases Division -11.5% 8,313 — Comparable* sales development of -6.4%, -2.9% incl. bolt-on acquisitions — Volumes are still below pre-crisis levels of Q3 2008, Gases 7,157
Slide 5: Group, operating profit by Divisions
Group, operating profit by Divisions Group operating profit excl. restructuring charges down 4.7% in € million, 9M 2008 9M 2009 as reported 1,910 -8.8% 1,741 Gases Division — Operating margin up 120 bp to 26.6% — Synergies, accelerated HPO implementation and positive pricing cushion lower volumes Ga
Slide 6: Gases Division, quarterly focus: Sequential development
Gases Division, quarterly focus Sequential development in € million 2009: Sequential development Ongoing sequential growth +3.9% +5.6% +40 bp +1.7% +8.4% +170 bp — Further sales increase on Q2 09 2,157 2,193 2,279 592 625 27.0% 27.4% 546 — Emerging Markets keep showing 25.3% the strongest momentum —
Slide 7: Gases Division, quarterly focus: Sequential development by operating segment
Gases Division, quarterly focus Sequential development by operating segment Western Europe Americas Asia & Eastern Europe South Pacific & Africa -2.2% +4.2% -1.8% – +4.9% +3.8% +15.5% +8.1% 935 952 501 449 466 386 914 492 492 428 357 309 Q1/09 Q2/09 Q3/09 Q1/09 Q2/09 Q3/09 Q1/09 Q2/09 Q3/09 Q1/09 Q2
Slide 8: Gases Division, operating segments: Western Europe
Gases Division, operating segments Western Europe in € million, as reported Sales Operating Profit Operating Margin 3,131 -10.5% 854 - 8.4% 2,801 782 27.3% +60 bp 27.9% 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M highlights — Comparable sales development of -5.4%, continued currency effect fr
Slide 9: Gases Division, operating segments: Americas
Gases Division, operating segments Americas in € million, as reported Sales Operating Profit Operating Margin 1,652 320 -1.3% 316 19.4% +190 bp 21.3% -10.1% 1,485 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M highlights — Comparable sales development of -8.3% — Further stabilisation, with initi
Slide 10: Gases Division, operating segments: Asia & Eastern Europe
Gases Division, operating segments Asia & Eastern Europe in € million, as reported Sales Operating Profit Operating Margin 1,459 417 -0.5% 415 -8.0% 1,343 28.6% +230 bp 30.9% 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M highlights — Comparable sales development of -6.4% — First indications of
Slide 11: Gases Division, operating segments: South Pacific & Africa
Gases Division, operating segments South Pacific & Africa in € million, as reported Sales Operating Profit Operating Margin +8.6% 1,052 +9.6% 250 23.5% +30 bp 23.8% 969 228 9M 2008 9M 2009 9M 2008 9M 2009 9M 2008 9M 2009 9M highlights — Comparable sales development of -6.1% — Elgas consolidation mor
Slide 12: Gases Division, sales bridge
Gases Division, sales bridge Sales -6.4% on comparable basis in € million +3.5% -1.4% -3.1% 7,157 -6.4% 6,629 Sequentially: Q1 Q2 Q3 -4.4% -5.8% -8.8% 9M 2008 Consolidation Currency Natural Gas Price/Volume 9M 2009 12
Slide 13: Gases Division, sales by product areas
Gases Division, sales by product areas (consolidated) Positive sequential momentum confirmed in Q3 2009 in € million 7,080* -6.4% +3.9% 2,279 2,193 6,629 259 726 +5.6% 257 +0.8% 767 Healthcare 1,579 -4.2% 524 Tonnage 490 +6.9% 1,513 1,791 -8.7% 538 +4.5% 562 1,636 Bulk 2,984 -9.1% 908 +2.9% 934 2,71
Slide 14: Gases Division, project pipeline
Gases Division, project pipeline Prospects for projects improving again — Total project number in our pipeline unchanged at 64 start-ups by 2011 (incl. JVs) — Still lower activity in new contract signings — However, customer discussions on potential projects show renewing interest, especially in Eme
Slide 15: Gases Division, Joint Ventures
Gases Division, Joint Ventures Consolidation effect, but strong operational performance in € million Proportionate Sales Share of Net Income (not incl. in the Group top-line) (contribution to operating profit) Reduction due to full consolidation of 10 Driven by new plant start-ups, former JV Elgas a
Slide 16: Engineering Division
Engineering Division Order backlog of € 3.9 billion Others — Order backlog of € 3.911 bn (year-end 2008: € 4.436 bn) 8% HyCo — Margin of 8.6% above target level of 8% 10% — Increased activity level of project development especially Nat. Gas Order 8% intake in Emerging Markets 9M 09 ASU 10% Nat. Gas
Slide 17: Group, cash flow statement
Group, cash flow statement Another strong cash flow contribution in Q3 in € million 9M 08 9M 09 Operating Profit 1,910 1,741 Change in Working Capital -241 25 Other changes -368 -342 Operating Cash Flow 1,301 1,424 Net investment in tangibles/ intangibles -773 -653 Acquisitions/Financial investments
Slide 18: Group, financial position
Group, financial position Well spread maturity profile with strong liquidity reserve Net debt, in € bn Cash position & credit facility cover all financial maturities Net debt/EBITDA of 2.5x in FY 2008 within target range of 2-3x until end of 2010 € 2 bn credit facility available until March 2011: 2,
Slide 19: Outlook 2009 unchanged
Outlook 2009 unchanged Economic background: — Moderate recovery expected in H2, based on the stabilisation since the end of H1 — 2009 global economic output to be significantly below 2008 Group — Further recovery in the second half-year compared to the first half as the economic improvement takes ho
Slide 20: Appendix
Appendix ee? & THE LINDE GROUP 20
Slide 21: Group Financial Highlights
Group Financial Highlights in € million 9M 08 9M 09 ∆ in % Sales 9,392 8,313 -11.5 Operating profit 1,910 1,741 -8.8 Margin 20,3 20,9 +60 bp Operating profit excluding restructuring charges 1,910 1,821 -4.7 Margin 20,3 21,9 +160 bp EBIT before special items and PPA depreciation 1,288 1,079 -16.2 Spe
Slide 22: Group Financial Highlights
Group Financial Highlights in € million 9M 08 9M 09 ∆ in % Net income - Part of shareholders Linde AG 552 417 -24.5 + depreciation/amortisation from purchase price allocation +277 221 + special items -59 - - respective tax impact -77 -69 Adjusted Net Income 693 569 -17.9 + Restructuring costs - +80
Slide 23: Accounting considerations: Impact of PPA and EFL
Accounting considerations Impact of PPA and EFL Purchase Price Allocation (PPA) IFRIC 4: Embedded Finance Lease (EFL) Impact in 9M 2009: € 221 m (9M 08: € 277 m) Impact* in 9M 2009: € -94 m (9M 08: € -95 m) Expected impact FY 2009: €275-325 m Expected impact* FY 2009: €-118 m *(on Sales and EBITDA)
Slide 24: Definition of financial key figures
Definition of financial key figures Operating Return EBITDA (incl. IFRIC 4 adjustment) excl. finance costs for pensions Profit excl. special items incl. share of net income from associates and joint ventures adjusted Return Operating profit - depreciation / amortisation ROCE excl. depreciation/amort
Slide 25: Thank you for your attention.
Thank you for your attention.