Linde Plc · NASDAQ:LIN
Linde — Q4 2023 Earnings Presentation
34 slides from Linde's earnings presentation, Feb 6, 2024
Slide 1: Investor Teleconference Presentation Fourth Quarter 2023
Linde plc Investor Teleconference Presentation Fourth Quarter 2023 February 6, 2024 Making our world more productive
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 forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, cou
Slide 3: Key Highlights - 2023
Key Highlights - 2023 Human Capital Environmental → Best in-class safety performance → YoY reduction absolute GHG emissions → Gender diversity 29%, 2030 goal 30%+ → Active renewable power +1 TWh → ~600 community engagement projects → Water Management Planning at >60% of globally, +20% YoY high-water
Slide 4: 5-Year Financial Performance
5-Year Financial Performance (1) (1) +62% +129% (2) (1) +147% +52% Linde Competitor 1 Competitor 2 Industry leading results where it matters most Source: Competitor filings and Factset. ROC calculated on a similar basis to Linde (1) Non-GAAP measures – see appendix or prior year presentations for re
Slide 5: 5-Year Total Shareholder Return (TSR)
5-Year Total Shareholder Return(1) (TSR) Index TSR (Dec. 31, 2018 = 100) 12/31/18 to 12/31/23 Linde +185% Competitor 1 +118% Competitor 2 +92% S&P 500 +107% LIN vs S&P500 +7.6% +7.5% +4.7% +13.7% +1.4% Linde, one of only 12 members in S&P500 (and only in sector) with positive alpha 5 consecutive yea
Slide 6: Fourth-Quarter Adjusted Results
Fourth-Quarter Adjusted Results (1) ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var YOY SEQ. Sales $8,302 $8,155 2% $7,899 5% Sales Growth + 5% + 2% Volume -- - 1% Operating Profit $2,272 $2,306 -1% $2,001 14% Price / Mix + 4% + 1% % of Sales 27.4% 28.3% 25.3% Cost pass-thru - 3% + 1% Currency + 2% - 1% Incom
Slide 7: 2023 Capital Management
2023 Capital Management Operating Cash Flow Trend ($B) Cash Outflows ~$11B Business Investment $4.7B Base Capex(1) $2.5B Net Share Buybacks $3.9B Secured Growth(2) $2.2B Dividends $2.5B Return to Shareholders $6.4B 2023 full-year $9B+ (YoY +5%) Reinvesting in the business & rewarding shareholders (1
Slide 8: 2024 Guidance
2024 Guidance Full-Year 2024 1st Quarter 2024 Adjusted EPS in the range of $15.25 to $15.65 Adjusted EPS in the range of $3.58 to $3.68 (1) (1) • +7% to +10% vs. 2023 • +5% to +8% vs. 2023 • Estimated YoY currency headwind -1% • Estimated YoY currency headwind -1% • +8% to +11% vs. 2023 excludin
Slide 9: Appendix
Appendix 9
Slide 10: Full-Year Adjusted Results
Full-Year Adjusted Results (1) ($MM) 2023 2022 Var YOY Sales Growth - 2% Sales $32,854 $33,364 -2% Volume - 1% Operating Profit $9,070 $7,904 15% Price / Mix + 6% Cost pass-thru (CPT) - 3% % of Sales 27.6% 23.7% Currency - 1% Income $6,989 $6,195 13% Acq / Div - 1% Engineering - 2% Diluted EPS $14.2
Slide 11: Americas
Americas ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var YOY SEQ. Sales $3,583 $3,629 -1% $3,421 5% Sales Growth + 5% - 1% Volume + 1% - 1% Operating Profit $1,075 $1,074 0% $944 14% Price / Mix + 5% + 1% % of Sales 30.0% 29.6% 27.6% Cost pass-thru - 5% -- Currency + 1% - 1% Acq / Div + 3% -- Sales by End Mar
Slide 12: APAC
APAC ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var YOY SEQ. Sales Growth + 5% -- Sales $1,639 $1,639 0% $1,567 5% Volume + 3% - 2% Operating Profit $452 $459 -2% $416 9% Price / Mix + 2% -- % of Sales 27.6% 28.0% 26.5% Cost pass-thru -- + 2% Currency -- -- Acq / Div -- -- Sales by End Market YoY margins u
Slide 13: EMEA
EMEA ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var YOY SEQ. Sales $2,100 $2,105 0% $2,026 4% Sales Growth + 4% -- Volume - 4% - 2% Operating Profit $615 $634 -3% $509 21% Price / Mix + 6% + 2% % of Sales 29.3% 30.1% 25.1% Cost pass-thru - 2% + 1% Currency + 4% - 1% Acq / Div -- -- Sales by End Market Cont
Slide 14: Engineering
Engineering Margin impacted by less project ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var settlements Sales $658 $467 41% $562 17% Continued productivity initiatives Operating Profit $119 $116 3% $157 -24% % of Sales 18.1% 24.8% 27.9% Good order intake of projects, $0.6B SOP (sale of plant) backlog
Slide 15: Global Other
Global Other ($MM) 4Q 2023 3Q 2023 Var 4Q 2022 Var YoY margin improvement led by coatings business and continued Sales $322 $315 2% $323 0% optimization of corporate costs Operating Profit $11 $23 -52% ($25) 144% % of Sales 3.4% 7.3% -7.7% 15
Slide 16: Global End Market Trends
Global End Market Trends % of Sales(1) YoY Sales(2) Seq. Sales(2) 4Q 2023 End Market & YoY Trend Growth Growth Consumer Related End Markets (More Resilient) Healthcare 17% +4% +2% Food & Beverage 9% +9% -4% Electronics 9% -4% +3% Industrial Related End Markets (More Cyclical) Manufacturing 22% +8% -
Slide 17: High-Quality Project Backlog $8.5B
High-Quality Project Backlog $8.5B Geography SOP Backlog (1) SOG Backlog (2) $3.6B $4.9B End Market Contractual growth Contractual growth Secure cash flow Secure cash flow Double-digit IRR Double-digit IRR Clean Energy High-quality customers High-quality customers Primarily enginee
Slide 18: Inflation Reduction Act (IRA) Overview
Inflation Reduction Act (IRA) Overview IRA was passed into law August 2022, in part to promote US decarbonization projects US tax code sections 45Q and 45V provide tax credits for carbon capture and low carbon intensity H2 projects, respectively The US Treasury recently issued proposed regulatio
Slide 19: ESG Performance vs. 2028 Goals
ESG Performance vs. 2028 Goals Decarbonizing our Future (1) Target: 35% Reduction in GHG Emissions Intensity 2018-2028 Linde Increases Hydrogen Production in Southeast United States Linde Starts-up Supply of Clean Hydrogen and Captured Carbon Dioxide to Celanese Linde Signs Long-Term Agreement
Slide 20: Sustainable Development Highlights
Sustainable Development Highlights Best-in-class Enabled the safety performance 350,000 people avoidance of >2x more Lost Workday Case Rate more benefited from global GHG emissions than 4x better than U.S. employee community Occupational than were emitted in all the Health and Safety Administration
Slide 21: Strategy + Clean Energy
Strategy Network density Capex efficiency Optimize the Base Productivity/digitalization Portfolio optimization Price management Price and volume Leverage the Recovery Cost management >10% EPS Operations optimization Growth Electronics Backlog start-up Capitalize on Growth Healt
Slide 22: Non-GAAP Measures
Non-GAAP Measures LINDE PLC AND SUBSIDIARIES SUMMARY NON-GAAP RECONCILIATIONS (UNAUDITED) The following adjusted amounts are Non-GAAP measures and are intended to supplement investors' understanding of the company's financial statements by providing measures which investors, financial analysts and m
Slide 23: Non-GAAP Measures, continued
Non-GAAP Measures, continued LINDE PLC AND SUBSIDIARIES APPENDIX NON-GAAP MEASURES AND RECONCILIATIONS (UNAUDITED) 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
Slide 24: Non-GAAP Measures, continued
Non-GAAP Measures, continued 2023 2022 Year to Date Year to Date Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 (Millions of dollars, except per share data) December 31, December 31, Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost Reported net pension and OPEB cost (benefit), excluding service cost $
Slide 25: Non-GAAP Measures, continued
Non-GAAP Measures, continued 2023 2022 Year to Date Year to Date Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 (Millions of dollars, except per share data) December 31, December 31, Reported Income taxes $ 1,814 $ 459 $ 487 $ 438 $ 430 $ 1,434 $ 388 $ 391 $ 286 $ 369 Reported effective tax rate 22.7 % 23.0 % 23.8 % 21.9
Slide 26: Non-GAAP Measures, continued
Non-GAAP Measures, continued 2023 2022 Year to Date Year to Date Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 (Millions of dollars, except per share data) December 31, December 31, Adjusted Diluted EPS (b) Reported diluted EPS $ 12.59 $ 3.16 $ 3.19 $ 3.19 $ 3.06 $ 8.23 $ 2.67 $ 2.54 $ 0.74 $ 2.30 Add: Pension settlement
Slide 27: Non-GAAP Measures, continued
Non-GAAP Measures, continued 2023 2022 Year to Date Year to Date Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 (Millions of dollars, except per share data) December 31, December 31, Adjusted EBITDA and % of Sales Net Income - Linde plc $ 6,199 $ 1,543 $ 1,565 $ 1,575 $ 1,516 $ 4,147 $ 1,328 $ 1,273 $ 372 $ 1,174 Add: Non
Slide 28: Non-GAAP Measures, continued
Non-GAAP Measures, continued (a) The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.
Slide 29: Non-GAAP Measures, continued
Non-GAAP Measures, continued LINDE PLC AND SUBSIDIARIES APPENDIX NON-GAAP MEASURES AND RECONCILIATIONS (Millions of dollars) (UNAUDITED) (Millions of dollars) 2023 2022 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Available Operating Cash Flow (AOCF) and Base Capex - Available operating cash flow is a measure used by in
Slide 30: Non-GAAP Measures, continued
Non-GAAP Measures, continued LINDE PLC AND SUBSIDIARIES APPENDIX NON-GAAP MEASURES AND RECONCILIATIONS (Millions of dollars) (UNAUDITED) (Millions of dollars) 2023 2022 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Free Cash Flow (FCF) - Free cash flow is a measure used by investors, financial analysts and management to
Slide 31: Non-GAAP Measures, continued
Non-GAAP Measures, continued (Millions of dollars) 2023 2022 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Reported net income - Linde plc $ 1,543 $ 1,565 $ 1,575 $ 1,516 $ 1,328 $ 1,273 $ 372 $ 1,174 Add: noncontrolling interests 33 36 37 $ 36 33 27 38 36 Add: interest expense - net 71 40 52 $ 37 31 18 5 9 Less: tax ben
Slide 32: Non-GAAP Measures, continued
Non-GAAP Measures, continued (Millions of dollars) 2023 2022 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Reported capital $ 55,804 $ 54,347 $ 55,381 $ 55,151 $ 53,865 $ 50,521 $ 53,428 $ 56,382 Total equity and redeemable noncontrolling interests $ 41,095 $ 40,238 $ 41,248 $ 41,336 $ 41,387 $ 38,939 $ 41,040 $ 44,390 A
Slide 33: Purchase Price Accounting (PPA) Outlook 2018 Merger
Purchase Price Accounting (PPA) Outlook 2018 Merger PPA NBV US$ (MM) 12/31/23 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Amortization 11,643 (464) (436) (436) (433) (420) (420) (420) (420) (420) (420) (420) (416) (414) Depreciation 2,059 (478) (341) (302) (152) (113) (91) (76)
Slide 34: Investor Relations
Investor Relations For further information, please contact: Phone: +1-203-837-2210 Email: investor.relations@linde.com Internet: www.linde.com/en/investors 34