Slide 1: January - June 2006 Conference Call
Linde Group January - June 2006 Conference Call July 28, 2006 Dr Peter Diesch, CFO
Slide 2: Contents
Linde Group Contents 04 | Linde Group 09 | Gas & Engineering 11 | Linde Gas 18 | Linde Engineering 21 | Material Handling 2
Slide 3: Disclaimer
Linde Group Disclaimer This investor presentation has been prepared independently by Linde AG (“Linde”). The presentation contains statements which address such key issues as Linde’s growth strategy, future financial results, market positions, and product development. Such statements should be caref
Slide 4: Adoption of IFRIC 4 accounting change
Linde Group Linde AG adopted the mandatory IFRIC 4 „Determining whether an arrangement contains a lease“ for the first time in January 1st, 2006. Due to the respectively required change in accounting policy, the comparative figures have been restated („restated“). 4
Slide 5: Impact of changes in accounting policy
Linde Group Impact of changes in accounting policy January to Group income statement June Year in € million 2006 2005 Net income after minority interests - as reported 193 501 Previously unrecognized actuarial gains/losses in relation to the measurement of pension obligations (IAS 19) 3 - Adjustment
Slide 6: Key Facts
Linde Group Key Facts — Linde fully on growth track: sales increase 10.7% to EUR 4,991 mn — Ongoing momentum in operating margins: EBIT up 29.0% to EUR 481 mn — Free Cash Flow improved by 104,4% to € 233 million — EPS increase of 31.6% to €2.25 (2005: €1.71), — Outlook for FY 2006 unchanged: increas
Slide 7: Income Statement
Linde Group Income Statement — Sales gain 10.7% to €4,991 million — EBIT increases by 29.0% to €481 million — Financial results includes first charge for take-over financing In € million Q2 06 ∆ H1 06 ∆ Sales 2,576 7.8% 4,991 10.7% EBITDA 446 12.3% 863 15.5% EBIT 256 23.1% 481 29.0% Financial result
Slide 8: Key Financials
Linde Group Key Financials In € million H1 05 H1 06 Operating cash flow 483 517 Free Cash Flow 114 233 Capex (excl. financial assets) 391 357 Net interest -55 -59 EBITDA / Net interest 13.6 14.6 Net debt* 2,051 1,523 Gearing ** 49% 33% * Financial debt – cash & cash equivalents and securities (excl.
Slide 9: Gas & Engineering
Linde Group Gas & Engineering
Slide 10: Gas & Engineering
Linde Group Gas & Engineering — Sales advance by 9.1% to €3,061 million — EBIT of €428 million is 20.9% above last year In € million Q2 06 ∆ H1 06 ∆ Sales 1,567 6.4% 3,061 9.1% EBITDA 320 12.3% 635 14.8% Margin 20.4% - 20.7% - EBIT 217 17.3% 428 20.9% Margin 13.8% - 14.0% - EBT 199 19.2% 399 24.3% 1
Slide 11: Linde Gas
Linde Group Linde Gas — Sales increase 8.8% to €2,388 million — EBIT improves by 16.0% to €385 million — EBIT margin gains 1,0% on last year In € million Q2 06 ∆ H1 06 ∆ Sales 1,190 2.4% 2,388 8.8% EBITDA 294 9.3% 588 11.8% Margin 24.7% - 24.6% - EBIT 193 12.2% 385 16.0% Margin 16.2% - 16.1% - EBT 1
Slide 12: Linde Gas - Sales bridge H1 2006: underlying growth of 6.9%
Linde Group Linde Gas - Sales bridge H1 2006: underlying growth of 6.9% — Underlying growth of 9.1% excluding the effect of embedded lease contracts in Mio. € +8,8% +8,8% +6,9% 2.223 +1,8% -0,6% +0,7% 2.388 2.194 H1/05 Currency Consolidation Natural Gas Volume/Price H1/06 12
Slide 13: Linde Gas – Regional Sales
Linde Group Linde Gas – Regional Sales — Solid underlying growth in all regions — Asia / Pacific shows strongest growth momentum In € million H1 05 H1 06 ∆ ∆ excl. currency Germany 451 490 8.6% 8.6% Europe excl. Germany 1,085 1,137 4.8% 4.5% North America 419 468 11.7% 7.1% South America 158 184 16.
Slide 14: Linde Gas – Product Segment Sales
Linde Group Linde Gas – Product Segment Sales — Cylinder and bulk segments keep solid growth path — Double digit advance in on-site sales — Healthcare gases grow above average with less capital intensity In € million H1 05 H1 06 ∆ ∆ excl. currency Bulk 593 654 10.3% 8.2% Cylinder 809 869 7.4% 5.6% O
Slide 15: Linde Gas - Healthcare Sales increased by 9.8%
Linde Group Linde Gas - Healthcare Sales increased by 9.8% (+7.5% excl. currency) In € million H1 06 H1 ∆ H1 ∆ excl. currency Institutional 219 8.4% 5.8% Homecare 96 9.1% 7.9% INO 65 18.2% 14.0% Healthcare 380 9.8% 7.5% 15
Slide 16: Linde Gas – on profitable growth path
Linde Group Linde Gas – on profitable growth path — Underlying sales growth of 9.1% for H1 2006: — Strong picture in Asia/Pacific region — Eastern Europe and South America are the other drivers — Mature markets contribute as well to the growth momentum — Structural growth potential in On-site and He
Slide 17: Linde Gas Outlook for FY 2006 unchanged
Linde Group Linde Gas Outlook for FY 2006 unchanged: — Increase in sales and EBIT 17
Slide 18: Linde Engineering
Linde Group Linde Engineering — Sales accelerated in Q2: H1 sales of €721 reached last year´s high level — EBIT increases by 27.3% to €42m — High EBIT margin reflects strong industry fundamentals In € million Q2 06 ∆ H1 06 ∆ Sales 405 10.1% 721 -0.6% EBITDA 28 33.3% 50 22.0% Margin 6.9% - 6.9% - EBI
Slide 19: Linde Engineering – booming end markets keep orders flowing in
Linde Group Linde Engineering – booming end markets keep orders flowing in - 27.8% increase in new orders to €1,153m - H1 order intake by segment: Others 9% Olefins 23% Air Separation 30% Natural Gas 16% Syngas 22% Order backlog standing at EUR 3,621 bn (+9.7% since year-end 2005) 19
Slide 20: Linde Engineering – strong demand in all segments
Linde Group Linde Engineering – strong demand in all segments — Air Separation: reflects strong demand for industrial gases across sectors and regions — Syngas: energy legislations and sourer crude drive need for refinery hydrogen — Natural Gas: tanker shipping alternative via LNG is in fact just ta
Slide 21: Material Handling
Linde Group Material Handling
Slide 22: Material Handling
Linde Group Material Handling — Sales advance 15.9% to €1,933 million — €116 million of EBIT is 48.7% above last year — EBIT margin strengthens by 1.3% to 6.0% In € million Q2 06 ∆ H1 06 ∆ Sales 1011 12.7% 1,933 15.9% EBITDA 150 11.9% 278 15.8% Margin 14.8% - 14.4% - EBIT 69 32.7% 116 48.7% Margin 6
Slide 23: Material Handling – H1 2006 market growth vs H1 2005
Linde Group Material Handling – H1 2006 market growth (order intake) vs H1 2005 Counterbalance Trucks Warehouse Trucks 50% 44% 44% 40% 30% 21% 18% 20% 15% 13% 14% 14% 12% 12% 12% 13% 11% 10% 0% Europe Eastern N. America S. America Asia Others World -10% Europe -20% -18% -30% Total 12% 44% 13% 13% 17
Slide 24: Material Handling: Leveraging good markets into strong profit growth
Linde Group Material Handling: Leveraging good markets into strong profit growth — Demand remains strong on broad basis — Global flow of goods drives build-up of logistic infrastructure, including forklifts — Strongest need in low-cost production regions like Asia and Eastern Europe — „Mature“ econo
Slide 25: Material Handling Outlook for FY 2006 unchanged
Linde Group Material Handling Outlook for FY 2006 unchanged: — Increase in sales and significant improvement of operating profit (EBIT) 25
Slide 26: Investor Relations Contacts
Linde Group Investor Relations Contacts Thomas Eisenlohr, Head of Investor Relations Tel: +49 611 770 610 E-mail: thomas.eisenlohr@linde.de Robert Schneider Tel: +49 611 770 270 E-mail: robert.schneider@linde.de 26