Linde Plc · NASDAQ:LIN
Linde — The Linde Group — 7th Cheuvreux German Corporate Conference 2008
27 slides from Linde's conference presentation, Jan 23, 2008
Slide 1: The Linde Group. Growing Together.
The Linde Group. Growing Together. 7th Cheuvreux German Corporate Conference Frankfurt, 23 January 2008 Georg Denoke, CFO
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Linde AG (“Linde”), The BOC Group plc (“BOC”) and their respective subsidiaries and businesses. These include, without limitation, those concerning the strategy of an integrated group, future growth potential of markets and produ
Slide 3: Contents
Contents 1 Global set-up in Gases & Engineering 2 Business Synergies 3 Status of Integration 4 Operating performance 3
Slide 4: Focus on Industrial Gases: Stable growth – attractive opportunities
Focus on Industrial Gases Stable growth – attractive opportunities Strong and stable growth Global Industrial Gases — Expected market growth of 7% p.a. Market Growth 1999-2009e — In line with historic performance €51.0 bn New applications across all end markets CAGR +7 % — For high innovation (solar
Slide 5: Gases Division - a truly global player
Gases Division - a truly global player # 1 or 2 position in 55 countries Present in >70 countries representing >90% of global GDP Market Leader #2 Player Others 5
Slide 6: Gases Division: Market leader in emerging regions
Gases Division Market leader in emerging regions Market #1 Share 35-40% #1 #2 #1 20-25% 15-20% 15-20% Eastern Europe South America South & East Asia Greater China Market 10-15% 5-10% >10% >10% Growth (CAGR) Source: Annual Reports, Broker Reports, Spiritus Consulting, Linde Group Analysis 6
Slide 7: Well balanced business mix
Well balanced business mix Growth opportunities and cash generation Merchant Market Tonnage — Global #1 in bulk and cylinder — Global #2 — Dominant market position in core markets — Significant increase of capacities — Broad and diversified customer base (business development and execution teams) —
Slide 8: Gases Division Tonnage – strong pipeline of start-ups
Gases Division Tonnage – strong pipeline of upcoming and recent start-ups Major recent wins: Wacker/ OMV Germany Borsodchem China, Ningbo Wanhua Polyurethane: BP/Sunoco Hungary Corus Bayer — 2 sets of ASUs + Pipeline USA Maksi Group Netherlands PR China SeverCorr Valero Russia — 8,000 tpd (O2, N, Ar
Slide 9: Engineering Division: Leading market position in all segments
Engineering Division Leading market position in all segments Air Separation Plants Hydrogen and Synthesis Gas Plants Top 1 Top 2 Products: Products: — Oxygen — H2/CO/Syngas — Nitrogen — Ammonia — Rare gases — Gas removal — Gas purification Main competitors: Main competitors: Air Liquide, Air Product
Slide 10: Engineering Division - Extending our LNG capability
Engineering Division - Extending our LNG capability Marketing a generic concept of floating LNG facilities Development of a Floating LNG Production, Storage and Offloading unit (“FPSO”) – Global Alliance with SBM, a market leader in the off-shore oil & gas industry – SBM contributes the marine techn
Slide 11: Engineering Division: Growth supported by structural mega-trends
Engineering Division Growth supported by structural mega-trends Energy challenges require new technological solutions → Linde has a strong expertise Liquified Natural Gas (LNG): Largest European LNG plant Liquefection renders transport built for Statoil in Hammerfest independent of pipelines (Norway
Slide 12: Contents
Contents 1 Global set-up in Gases & Engineering 2 Business Synergies 3 Status of Integration 4 Operating performance 12
Slide 13: Engineering Division: Competitive advantage of the integrated offer
Engineering Division Competitive advantage of the integrated offer Engineering set-up holds key competitive advantages for the Tonnage Gases Segment Deep and broad technology portfolio Leading position in traditional markets for ASU and hydrogen/syngas plants Early involvement in new energy applicat
Slide 14: 147 Linde-built plants in China
Engineering Division - Leveraging customer relationships 147 Linde-build plants in China Heilongjiang Jilin Liaoning Xinjiang Beijing Dalian Ningxia Tianjin Shandong Shanxi Jiangsu Gansu Shaanxi Henan Anhui Shanghai Taipei Hubei Taichung Sichuan Zhejiang Jiangxi Hunan Fujian Mai Liao Taiwan Air sepa
Slide 15: 82 Linde-built plants in South and East Asia
Engineering Division - Leveraging customer relationships 82 Linde-build plants in South and East Asia Myanmar Hanoi Laos Hainan Yangon Thailand Sepon Bangkok Manila Cambodia Vietnam Philippines Sabah Brunei Malaysia Sarawak Singapor Sulawesi Borneo Sumatra Indonesia Air separation plants Jakarta Gas
Slide 16: Contents
Contents 1 Global set-up in Gases & Engineering 2 Business Synergies 3 Status of Integration 4 Operating performance 16
Slide 17: Significant deleveraging achieved
Significant deleveraging achieved Year-end net debt target below € 7.2 bn In € million 13,677 Debt rating upgrade by one notch 6,951 from S&P and Moody´s in March / April 2007 (S&P: BBB; Moody’s: Baa1) 1,505 2005 Acquisition 9M 2007 of BOC No financial constraints on growth investments from the BOC
Slide 18: Capital market debt: Solid maturity profile
Capital market debt Solid maturity profile No major maturities until April 2012 after issuance of senior benchmark bonds in April at attractive rates: € 1 bn, 5 year with fixed coupon of 4,375% (at midswap +24 bp) € 1 bn, 10 years with fixed coupon of 4,750% (at midswap +45 bp) GBP 300 mn, 16 years
Slide 19: Synergy ramp-up / run-rate
Synergy ramp-up / run-rate End of 2008: € 250 mn In € million 30% 2007 100 15% Supply 20% Procurement 25% 65% G&A 45% 0 End 2006 Q1 Q2 Q3 Q4 — Confirmation of € 50 mn P&L impact in 2007 — G&A initiatives largely contribute to the impact in 2007, mainly driven by FTE reduction; Former BOC’s headquart
Slide 20: Continuous improvement culture
Continuous improvement culture GAP programme: Synergies — Strategic programme for •Integration related •Efficiency related future development of the Linde •€ 250 mn savings •Further growth company — Profitable growth and GAP efficiency improvement — Roll-out of experience from all programmes across
Slide 21: Contents
Contents 1 Global set-up in Gases & Engineering 2 Business Synergies and Business Development 3 Status of Integration 4 Operating performance 21
Slide 22: Group 9M 2007: Sales and Operating Profit by division
Group, 9M 2007 Sales and Operating Profit by division Sales Operating Profit in € million 14.7% 16.7% 8,958 1,770 7,811 1,517 6,279 9.1% 6,850 1,524 12.0% 1,707 Gases 1,835 Engineering 1,211 51.5% 50.9% 160 321 273 106 Corp./Cons. -15.0% 14.2% -113 -97 9M 2006 9M 2007 9M 2006 9M 2007 22
Slide 23: Gases Division 9M 2007: Sales by product segment and regions
Gases Division, 9M 2007 Sales by product segment and regions in € million By segment* By region 734 Asia / Healthcare 674 8.9% 1,202 2,519 24.8% Pacific 1,567 Tonnage 1,431 9.5% Americas/ 2,116 2,203 Africa 4.1% Bulk 1,982 6.1% 2,103 3,232 7.8% 3,483 Europe Cylinder 2,519 7.7% 2,714 9M 2006 9M 2007
Slide 24: Engineering Division 9M 2007 Key Figures
Engineering Division, 9M 2007 Key Figures — Order intake as of September close to high level of 2006 Others — Nine-months sales rise 51.5% to € 1.835 bn 6% HyCo — Increase in operating profit of 50.9% to € 160 mn 17% Olefin 35% — Order backlog stable at € 4.6 bn per September Order intake Natural 9M
Slide 25: Outlook: Double-digit growth of sales and operating profit
Outlook Double-digit growth of sales and operating profit in 2007 2007: — Sales of more than € 12 bn, Operating profit of € 2.3 -2.4 bn Group — Nebt debt to be below € 7.2 bn 2010 : — Operating profit above € 3 bn Gases Division — Sales increase above market growth — Overproportionate increase of op
Slide 26: The Linde Group is a global industry leader
The Linde Group is a global industry leader Strong set-up for future value creation Pure play in Gases & Engineering Both divisions hold leading positions in attractive markets Integrated offer provides us with a competitive advantage Truly global footprint Worldwide presence, over 70 countries cove
Slide 27: Thank you for your attention.
Thank you for your attention.
The Linde Group — 7th Cheuvreux German Corporate Conference 2008 on 6ix