Slide 1: January – March 2010 Conference Call
January – March 2010 Conference Call Georg Denoke Member of the Executive Board & CFO 4 May 2010
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 Back to growth in 2010 Group sales increase of 7.4% to € 2.894 bn Group operating profit rises 19.1% to € 641 m Reported EPS of € 1.17 (+72.1%), adjusted EPS of € 1.41 (+42.4%) Operating Cash Flow of € 397 m (Q1 09: € 412 m) Economic recovery and HPO savings drive earnings growth Further
Slide 4: Group, sales by Divisions
Group, sales by Divisions Gases recovery drives group sales up 7.4% in € million, Q1 2009 Q1 2010 as reported 2,894 2,695 +7.4% Gases Division — Comparable* sales increase of 3.9% — Global economic recovery drives improving volumes, strongest growth in tonnage and bulk product areas +8.5% 2,340 — Po
Slide 5: Group, operating profit by Divisions
Group, operating profit by Divisions 210 bp group margin improvement supported by HPO savings in € million, Q1 2009 Q1 2010 as reported 641 Gases Division +19.1% 538 — Double-digit operating profit growth — Overproportionate growth compared to sales: operating margin increase of 140 bp to 26.7% (Q1
Slide 6: Gases Division, sales bridge
Gases Division, sales bridge Sales increase of 3.9% on comparable basis in € million +3.9% 2,340 +0.9% +4.3% -0.6% 2,157 Q1 2009 Consolidation Currency Natural Gas Price/Volume Q1 2010 6
Slide 7: Gases Division, sales by operating segment
Gases Division, sales by operating segment Emerging markets still show the strongest momentum in € million Western Europe Asia & Eastern Europe — Volume recovery visible in our industrial end markets 935 +3.7% 970 17.3% 502 — Strongest momentum in 428 Emerging Markets, with double-digit growth in +2
Slide 8: Gases Division, operating profit by operating segment
Gases Division, operating profit by operating segment HPO continues to drive margin improvements in € million Western Europe Asia & Eastern Europe — YoY margin increase in the Gases Division +11.3% 20.2% supported by efficiency 247 275 155 129 improvements in all +200 bp +80 bp 28.4% 30.9% operating
Slide 9: Gases Division, sales by product areas (consolidated)
Gases Division, sales by product areas (consolidated) Business environment improving in all product areas in € million, comparable*, 2,340 2,252* +3.9% consolidated +2.7% 265 258 Healthcare +10.3% 569 516 Tonnage 541 +5.2% 569 Bulk Cylinder 937 - 937 *excluding currency, natural gas price and consol
Slide 10: Gases Division, project pipeline
Gases Division, project pipeline € 2.85 bn of investment, majority in emerging markets — 2012 pipeline of 10 projects with a combined project amount of ~ € 400 m, several new signings in the first quarter — € 2.85 bn investments between 2008-2012 (thereof € 0.5 bn in JVs @ share) — Most significant
Slide 11: Engineering Division, key figures
Engineering Division, key figures Strong order backlog supported by a recovery in new orders — Sales recognition in line with planned order execution — Order intake of € 502 m up 76% from last year´s low level — Order backlog up to €4.281 bn (year-end 2009: €4.215 bn) — Unchanged margin target of 8%
Slide 12: Group, cash flow statement
Group, cash flow statement Free cash flow up in € million Q1 09 Q1 10 Operating Profit 538 641 Change in Working Capital -37 -98 Other changes -89 -146 Operating Cash Flow 412 397 Investments in tangibles / intangibles -267 -223 Acquisitions / Financial investments -60 -6 Other 45 38 Investment Cash
Slide 13: Group, solid financial position
Group, solid financial position Successful deleveraging rewarded with rating upgrade 2009 Net debt/EBITDA ratio of 2.6x, well within our target range of 2-3x Net debt in € bn Net debt/EBITDA 3,5 12.815 4.8 9.933 3.03 Target 2.7 range: 6.427 6.423 6.119 6.054 2.6 2.0–3.0x 2.5 2.5 2,5 2.02 30/9/06 200
Slide 14: 2010 outlook
2010 outlook Based on current consensus expectations for a moderate economic recovery Group: Growth in sales and operating profit vs 2009 — Capital expenditure above 2009 level — Confirmation of HPO programme: € 650-800 m of gross cost savings in 2009-2012 Gases: Increase in sales and operating prof
Slide 15: Appendix
Appendix rt LD THE LINDE GROUP
Slide 16: Group Financial Highlights
Group Financial Highlights in € million Q1 09 Q1 10 in % Sales 2,695 2,894 +7.4 Operating profit 538 641 +19.1 Margin 20.0 22.1 +210 bp EBIT before special items and PPA depreciation 323 410 +26.9 PPA depreciation 74 59 - EBIT 249 351 +41.0 Financial Result -79 -68 - Taxes 42 70 - Net income 128 213
Slide 17: Gases Division, Joint Ventures
Gases Division, Joint Ventures Asian projects drive growth of our JV sales in € million Proportionate Sales Share of Net Income (not incl. in the Group top-line) (contribution to operating profit) 10 18 16 +12.3% -11.1% 82 73 Q1 2009 Q1 2010 Q1 2009 Q1 2010 17
Slide 18: Group, Accounting considerations
Group, Accounting considerations Impact of PPA and EFL Purchase Price Allocation (PPA) IFRIC 4: Embedded Finance Lease (EFL) Impact in Q1 2010: € 59 m (Q1 2009: € 74 m) Impact* in Q1 2010 : € -28 m (Q1 2009 : € -32 m) Expected impact FY 2010: €200-250 m Expected impact* FY 2010: €-112 m *(on Sales a
Slide 19: Definition of financial key figures
Definition of financial key figures Operating Return EBITDA (incl. IFRIC 4 adjustment) excl. finance costs for pensions Profit excl. non-recurring items incl. share of net income from associates and joint ventures adjusted Return Operating profit - depreciation / amortisation ROCE excl. depreciation
Slide 20: Thank you for your attention.
Thank you for your attention.