Linde Plc · NASDAQ:LIN
Linde — Non-Deal Roadshow (October 2003)
40 slides from Linde's roadshow presentation, Oct 7, 2003
Slide 1: US Roadshow October 7-10, 2003
US Roadshow October 7-10, 2003 Dr. Wolfgang Reitzle, CEO Hero Brahms, CFO Analysts‘ Conference 2003 Seite 1 1
Slide 2: Company Overview
Company Overview Linde Group 2002 Sales: € 8,726 Mio. EBITDA: € 1,436 Mio. Material Handling Gas and Engineering Refrigeration 2002 Sales € 2,979 Mio. € 4,916 Mio. € 879 Mio. 2002 EBITDA € 433 Mio. € 1,110 Mio. € 32 Mio. EBITDA margin 15% 23% 4% Gas Engineering Sales: € 3,880 Mio. Sales: € 1,036 Mio
Slide 3: Maintained leading market position in all Business Segments
Company Overview Maintained leading market position in all Business Segments Europe World Linde Gas 1 (26%) 5 (10%) Linde Engineering Market Leader Material Handling 1 (36%) 1 (19%) Refrigeration 1 (42%) 2 (15%) Analysts‘ Conference 2003 * 2002 market sharesSeite 3 3
Slide 4: Stable Business Model
Company Overview Stable Business Model 8,833 8,726 8,450 1,274 6,194 1,115 € Mio. 4,500 979 965 885 913 567 705 412 370 1996 1999 2000 2001 2002 (IAS) (IAS) Sales Cash Flow from operating activities Capex (incl. financial assets) Analysts‘ Conference 2003 Seite 4 4
Slide 5: Group Strategy
Company Strategy Group Strategy Linde remains a portfolio driven company. But to stay part of the portfolio, every Division must … … be able to achieve defined ROCE targets … have a leading market position … have the potential for top-line growth … be at least as good as benchmarks (pure play compan
Slide 6: Divisions
Divisions Analysts‘ Conference 2003 Seite 6 6
Slide 7: Linde Gas
Linde Gas • Market leader in Europe • Good market position in South America • Strong regional positions in North America Strategy • Focus on growth segments On-site, Hydrogen, Helium and Healthcare • Completion of € 150 Mio. cost reduction programme by end of 2004 Analysts‘ Conference 2003 Seite 7 7
Slide 8: Linde Gas Product Segments - the Business Mix
Linde Gas Product Segments - the Business Mix • Growing share of On-site and Healthcare business • Declining share of cylinder business 2001 H1/2003 Cylinder 44 % Cylinder 39 % Bulk 25 % Bulk 26 % On-site 18 % On-site 20 % Healthc. 13 % Healthc. 15 % Analysts‘ Conference 2003 Seite 8 8
Slide 9: Linde Gas Healthcare
Linde Gas Healthcare • Sales growth of 7.4 % (+ 12.6 % ex currency) in 2002 • EBITA in the range of 20% • Unique Therapeutic gas INO Sales in € Mio. Total 950 Homecare/Institutional INO 40 GEMI, LMS Outlook: • Strong sales growth ahead Total 571 Total 532 • Higher R & D costs Total 461 5 670 4 464 4
Slide 10: Capex and R&D allocated to Homecare and INO
Linde Gas Capex and R & D allocated to Homecare and INO • Homecare (approx. 15- 20 % CAGR, incl. acquisitions) - Leading market position in Europe and South America 125 - Strong position as third party supplier in US market - Further growth driven by smaller acquisitions Sales 2002 (€ Mio.) 344 102
Slide 11: Linde Gas Cost reduction projects of € 150 Mio.
Linde Gas Cost reduction projects of € 150 Mio. € (fully effective in 2005) 150 04e: € 150 Mio. € Mio. Supply 50% 03e: € 50 Mio. 100 H1/03: € 25 Mio. Purchase 10% 50 Supply 66% SG&A 23% Purchase 18% Supply 70% SG&A 6% Healthcare 13% Purchase 15% SG&A 6% Healthcare 10% Healthcare 9% 0 Headquarter 4%
Slide 12: Linde Engineering
Linde Engineering • Leading market position in most activities • Close co-operation with Linde Gas Strategy • Remain a focussed player • Strengthen technology leadership Analysts‘ Conference 2003 Seite 12 12
Slide 13: Linde Engineering New Projects
Linde Engineering New Projects • High order intake for ASU in H1 2003 Others Olefins 10% 15% 25% Natural Gas Air Separation 48% 2% Syngas Analysts‘ Conference 2003 Order intake in H1 2003: € 727 Mio. Seite 13 13
Slide 14: Material Handling
Material Handling • World market leader • Multi Brand approach Strategy • Top priority lies on re-organisation and optimisation to achieve sustainable earnings recovery • Extension of service business Analysts‘ Conference 2003 Seite 14 14
Slide 15: TRIM.100 – Project scope
Material Handling TRIM.100 – Project scope Sales Production Logistics Brand Service Product Adminis- Purchasing (Make or Supply Quality Positioning Spare Parts Design tration Buy) Distribution Used Trucks Phase 1: (Focus Short Term) Phase 2: (Focus Medium Term) Optimisation of existing structures: S
Slide 16: TRIM.100 – Cost reduction of € 100 Mio.
Material Handling TRIM.100 – Cost reduction of € 100 Mio. (fully effective in 2005) 100 04e: € 100 Mio. € Mio. Sales 21% 75 03e: € 30 Mio. Purchase 19% H1/03: € 11 Mio. 50 Design 17% Sales 34% Purchase 23% 25 Sales 30% Production 37% Production 25% Admin. 18% Purchase 30% Production 23% Admin. 17% A
Slide 17: Refrigeration
Refrigeration • Market leader in Europe • Facing difficult market situation Strategy • Separate legal entity by end of 2003 and development of a new business model • Completion of € 25 Mio. restructuring programme by end of 2004 Analysts‘ Conference 2003 Seite 17 17
Slide 18: Outlook
Outlook Analysts‘ Conference 2003 Seite 18 18
Slide 19: Outlook: Expectations for FY 2003
Outlook Expectations for FY 2003 Group: • Slight growth in sales • Slight improvement of EBITA (before one-time items) • Further restructuring burden possible for 2nd phase of TRIM. programme • Linde Gas: Flat sales and declining operating profit • Linde Engineering: Increased sales, profit below la
Slide 20: Outlook: Mid-term Financial Targets
Outlook Mid-term Financial Targets • Debt reduction of € 300 Mio. per year on average, mid-term gearing target: 50% • Generation of free cash flow through working capital management and disciplined Capex approach • Realisation of € 275 Mio. cost reduction by end of 2004 in Linde Gas, Material Handli
Slide 21: Appendix
Appendix Analysts‘ Conference 2003 Seite 21 21
Slide 22: Sales by Regions
Company Overview Sales by Regions (Total € 8,726 Mio.) 4,362 4,449 in € Mio. 2,196 2001 2002 1,994 1,675 1,479 641 478 122 163 Germany Rest of Europe Americas Asia Africa/Australia Analysts‘ Conference 2003 Seite 22 22
Slide 23: Geographic Revenue 2002 Breakdown
Company Overview Geographic Revenue 2002 Breakdown Gas & Engineering Material Handling Refrigeration South Africa/ North Asia Africa/ America Australia South America Africa/ South 9% Australia Australia North 1% Asia 2% America 0.4% America 2% Germany 5% Germany Asia 1% America 3% Germany 5% 26% 3.6
Slide 24: Key financial ratios - Group
Financials Key financial ratios - Group In € Mio. 1H 2003 2002 2001 Sales 4,167 8,726 8,833 EBITDA 631 1,436 1,519 Net Interest - 73 - 170 - 209 Net Income 52 240* 241 Net Debt** 2,771 2,814 3,264 Equity 3,877 4,086 4,313 Net Debt / EBITDA 1.99x*** 1.96x 2.15x EBITDA / Net Interest 8.6x 8.4x 7.3x De
Slide 25: Conversion of ROCE - Divisions
Financials Conversion of ROCE - Divisions old new +Interest expenses for pensions EBITA EBITA ROCE = +Pension provisions +Goodwill Operating Operating Capital Capital employed employed Analysts‘ Conference 2003 Seite 25 25
Slide 26: Conversion of ROCE - Group
Financials Conversion of ROCE - Group old new +Interest expenses for pensions EBT EBT +Interest expenses +Interest expenses ROCE = + Pension Provisions Capital Capital employed employed Analysts‘ Conference 2003 Seite 26 26
Slide 27: Pension Obligations - Different Systems
Financials Pension Obligations - 2 Different Systems I II Internally financed Externally funded pension obligations pension obligations Mainly in Germany Mainly in the USA, UK, CH, N, NL and FIN Gross Obligation (DBO): € 1,015 Mio. Gross Obligation (DBO): € 794 Mio. Plan Assets: € 653 Mio. Analysts‘
Slide 28: Pension Obligations
Financials Pension Obligations • Net Obligation: €1,156 Million In € Mio. 2002 Defined Benefit Obligation 1,809 Of which internally financed 1,015 Of which externally funded 794 Fair value of Plan assets - 653 Net Obligation 1,156 Unrecognized actuarial losses - 141 Limitation (IAS 19.58) 8 Provisio
Slide 29: Pension Related Expenses and Cash Payments
Financials Pension Related Expenses and Cash Payments 2001 2002 Pension Cash Pension Cash In € Mio. Expense Payments Expense Payments Defined Benefit Plans 1. Regular 96 68 100 74 (Of which financial items) (50) (53) 2. Special Contribution 22 Defined Contribution Plans 5 5 6 6 Total 101 73 106 102
Slide 30: Linde Gas Key figures
Linde Gas Key figures In € Mio. 2001 2002 ∆ Sales 3,875 3,880 + 0.1 % Sales (ex currencies & natural gas) + 4.4 % EBITDA 1,037 1,034 - 0.3 % Margin 26.8 % 26.6 % EBITA 599 606 + 1.2 % Capital employed 6,782 6,256 - 7.8 % ROCE 9.1 % 9.6 % Cashflow 668 756 + 13.2 % Capex 449 410 - 8.7 % Analysts‘ Conf
Slide 31: On-site Projects
On-site Projects Location Customer Type Year Duisburg, Germany Thyssen Krupp Stahl Airgases, Rare Gases 2000 Dunaujvaros, Hungary Dunaferr Airgases 2000 Burghausen, Germany Wacker Chemie Ultra-pure Hydrogen 2000 Chalampe, France Butachemie Ultra-pure Hydrogen 2000 Brunsbüttel, Germany Bayer H2, CO 2
Slide 32: Development pipeline for new INO-based applications
Linde Gas Healthcare: Development pipeline for new INO-based applications - Exp. peak sales of around € 700 Mio. until 2010 - Therapeutic principle Stage of R&D Exp. filing date Neonatal intensive care Pre term neonates Phase 3 2005 Acute cardio-pulmonary disease Thoracic surgery Phase 3 2005 Chroni
Slide 33: Linde Engineering Key figures
Linde Engineering Key figures In € Mio. 2001 2002 ∆ Sales 1,047 1,036 - 1.1 % EBITDA 67 76 + 13.4 % EBITA (incl. interest income) 52 53 + 1.9 % Margin 5.0 % 5.1 % Capital employed 475 502 + 5.7 % ROCE 14.9 % 13.3 % Cashflow 44 184 Capex 38 29 - 23.7 % Analysts‘ Conference 2003 Seite 33 33
Slide 34: Linde Engineering Leading market positions
Linde Engineering Leading market positions in most activities - Market share in Natural Gas with exp. overproportionate growth - € 320 Mio. € 600 Mio. Olefins Total Market 25 % 27 % Volume in 2003 € 1,250 Mio. € 2,200 Mio. 15% Hydrogen / Syngas / Gas Total € 7,380 Mio. € 250 Mio. Natural Gas 7% € 20
Slide 35: Material Handling Key figures
Material Handling Key figures In € Mio. 2001 2002 ∆ Sales 3,071 2,979 - 3.0 % EBITDA 512 433 - 15.4 % EBITA 240 148 - 38.3 % Margin 7.8 % 5.0 % Capital employed 2,016 1,810 - 10.2 % ROCE 13.1 % 8.7 % Cashflow 413 462 + 11.9 % Capex 433 404 - 6.7 % Of which Rental Business 193 245 + 26.9 % Analysts‘
Slide 36: Material Handling Sales development 1993-2002
Material Handling Sales development 1993-2002 3500 + 4.0% - 3.0% € Mio. + 12.8% 3000 + 14.6% 2500 + 12.1% + 7.9% + 9.1% 2000 + 7.7% + 8.5% 1500 1000 500 0 93 Analysts‘ Conference 2003 94 95 96 97 98 99 00 01* 02* * IFRS Seite 36 36
Slide 37: Material Handling Service Business
Material Handling Service Business – 2002: 38% of Sales (Target: 40%) > 50% of Profit Service / Fleet New Spare Used Long-term trucks Parts Rental Leasing Insurance Mainte- manage- trucks nance warranties ment • Well positioned to control end-market Used Trucks • Development of new marketing tools R
Slide 38: Refrigeration Key figures
Refrigeration Key figures In € Mio. 2001 2002 ∆ Sales 887 879 - 0.9 % EBITDA 30 32 + 6.7 % EBITA 10 10 Margin 1.1 % 1.1 % Capital employed 372 370 - 0.5 % ROCE 4.2 % 5.1 % + 21.4 % Cashflow 94 36 - 61.7 % Capex 31 33 + 6.5 % Analysts‘ Conference 2003 Seite 38 38
Slide 39: Refrigeration Restructuring Programme
Refrigeration Restructuring Programme • Outsourcing part of assembling and service activities • Improved productivity in our German factory • Further shift of production to Cost savings by year-end 2004: the Czech Republic € 25 Mio. • Building of an additional plant in the Czech Republic • Personnel
Slide 40: Investor Relations
Contact us Investor Relations Thomas Eisenlohr Head of Investor Relations Tel.: +49 611 770 610 Fax: +49 611 770 690 thomas.eisenlohr@linde.de Marc Weisener Tel.: +49 611 770 468 Fax: +49 611 770 690 marc.weisener@linde.de Analysts‘ Conference 2003 Seite 40 40