Linde Plc · NASDAQ:LIN
Linde — Non-Deal Roadshow (April 2003)
44 slides from Linde's roadshow presentation, April 2003
Slide 1: Roadshow April 8-10, 2003
Roadshow April 8-10, 2003 Dr. Wolfgang Reitzle, CEO Hero Brahms, CFO Analysts‘ Conference 2003 Seite 1
Slide 2: Analysts‘ Conference 2003 Seite 2
Analysts‘ Conference 2003 Seite 2
Slide 3: Group FY 2002
Linde Group FY 2002 • Slight decline in sales due to drop in domestic sales • Drop in EBITA compensated by lower interest charge and reduced tax rate • Income from the sale of Dresdner Bank stake (165 million €) offset by significant one-off expenses • 240 million € earnings in line with last year (
Slide 4: Income Statement
Linde Group Income Statement • Interest Result Improved • Tax Rate lower due to Dresdner Bank Sale In Million € 2001 2002 ∆ Sales 8,833 8,726 - 1.2 % Sales ex currencies + 0.7 % EBITDA 1,519 1,436 - 5.5 % EBITA 764 647 - 15.3 % Goodwill 114 124 + 8.8 % EBIT 650 523 - 19.5 % Financial result - 203 -
Slide 5: Strong Cashflow, Reduced Capex, Reduced Capital Employed
Linde Group • Strong Cashflow (+14.3 %) • Investment Discipline has led to Reduced Capex (incl. Financial Assets) • Capital Employed Reduced by 767 Million € In Million € 2001 2002 ∆ Earnings per share 2.02 2.01 - 0.5 % Earnings per share pre goodwill 2.98 3.05 + 2.3 % Cash flow from operating activ
Slide 6: Outlook
Linde Group Outlook • Concentration on core business • Focus on fast growing markets • Realization of optimization programs in Linde Gas, Material Handling and Refrigeration • Implementation of controlling tools (Six Sigma and Balanced Scorecard) Analysts‘ Conference 2003 Seite 5 6
Slide 7: Divisions
Divisions Analysts‘ Conference 2003 Seite 7
Slide 8: Gas: FY 2002 and Outlook
Linde Gas FY 2002 … • Sales flat due to currency & natural gas price effects - Adjusted plus 4.4% • Only slight profit increase due to one - off items, currencies, shift in the portfolio and higher R&D & start- upcost for INO • Increased free cash flow of around 400 million € Outlook … • Focus on gr
Slide 9: On-site, Hydrogen, Helium
Linde Gas On-site, Hydrogen, Helium • On-site revenues up by 2% (natural gas price effect minus 36 mio €) - Extended capacity of Europe‘s largest hydrogen production facility in Leuna (Germany) - Among other projects 30 contracts were signed for ECOVAR plants • Hydrogen sales decreased from 249 to 2
Slide 10: Healthcare
Linde Gas Healthcare FY 2002 … • Sales growth of 7.4 % (+ 12.6 % ex currency) • EBITA in the range of 20% - plus 10.3 % in 2002 (+ 17 % ex currency) Outlook… • Strong sales growth ahead • Higher R & D costs In Million € 2001 2002 2006e Institutional Care / Homecare 447 464 > 670 INO 81 102 > 240 GEM
Slide 11: Engineering: FY 2002 and Outlook
Linde Engineering FY 2002 … • Stable sales and operating profit • Order intake plus 24.2% • Leading market positions in most activities • Cooperation with BOC- Group starts to pay off Outlook … • Order situation points to promising future sales • Low risk profile Analysts‘ Conference 2003 Seite 10 1
Slide 12: New Projects
Linde Engineering New Projects • Strong Demand across all Segments • BOC: 3 Air Separation Plants in China and USA, 1 Hydrogen Plant in USA In Million € 2002 Olefins 361 Natural Gas 539 Syngas 167 Air Separation 217 Others 209 TOTAL 1,493 Analysts‘ Conference 2003 Seite 11 12
Slide 13: Material Handling: FY 2002 and Outlook
Material Handling FY 2002 … • Lower sales caused by market decline • Market pressure and lower utilization rate hurt profitability - Operating profit decreased by 38.3% Outlook … • Top priority lies on reorganization and optimization to achieve sustainable earnings recovery: - TRIM.100 program will
Slide 14: TRIM.100 – Optimization of the Brand Alliance
Material Handling TRIM.100 – Optimization of the Brand Alliance Linde Still OM Komatsu • Marketing Optimization • Location Optimization • Logistics of purchasing and distribution Optimization across all brands Optimization across the two groups and all brands • Positioning of brands • Purchasing • C
Slide 15: Service Business
Material Handling Service Business – 2002: 38% of Sales (Target: 40%) > 50% of Profit Service / Fleet New Used Spare Long-term trucks trucks Rental Leasing Insurance Mainte- manage- parts nance warranties ment • Well positioned to control end-market Used Trucks • Development of new marketing tools R
Slide 16: Refrigeration: FY 2002 and Outlook
Refrigeration FY 2002 … • Sales and operating profit on last year‘s level • Cost savings eaten up by market Outlook … • New legal structure leaves all options open • Additional measures will lead to further cost reduction - Productivity improvements and shift of production lead to further cost savin
Slide 17: Outlook
Outlook Analysts‘ Conference 2003 Seite 17
Slide 18: Expectations for FY 2003
Outlook Expectations for FY 2003 Group: • Slight growth in sales • Noticeable improvement of EBITA • Linde Gas: Sales growth, increase in operating profit • Linde Engineering: Sales and profit growth • Material Handling: Slight increase in sales, sustainable profit growth • Refrigeration: Sales and
Slide 19: Mid-term ROCE Targets
Outlook Mid-term ROCE Targets 2002 Target Group 7.0 % 10 % Linde Gas 9.6 % 11 % Linde Engineering 13.3 % 16 % Material Handling 8.7 % 16 % Refrigeration 5.1 % 8% Analysts‘ Conference 2003 Seite 18 19
Slide 20: Appendix
Appendix Analysts‘ Conference 2003 Seite 20
Slide 21: Sales Decreased to 1,184 Million €
First 2 Months 2003 Sales Decreased to 1,184 Million € (minus 2.1 %) Ex Currency plus 3.6 % In Million € Per 02/02 Per 02/03 ∆ Gas and Engineering 679 689 + 1.5 % Linde Gas 652 641 - 1.7 % Linde Engineering 44 61 + 38.6 % Material Handling 462 430 - 6.9 % Refrigeration 67 62 -7.5 % Group 1,210 1,184
Slide 22: Order Intake up to 1,425 Million €
First 2 Months 2003 Order Intake up to 1,425 Million € (plus 4.7 %) In Million € Per 02/02 Per 02/03 ∆ Gas and Engineering 736 805 + 9.4 % Linde Gas 651 641 -1.5 % Linde Engineering 90 181 + 101.1 % Material Handling 486 486 -- Refrigeration 135 132 - 2.2 % Group 1,361 1,425 + 4.7 % Analysts‘ Confer
Slide 23: Sales by Regions
Linde Group Sales by Regions (Total 8,726 Million €) 4,362 4,449 In Million € 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 2322
Slide 24: Financial Situation
Linde Group Financial Situation • Improved Interest Coverage Ratio • Lower Gearing In Million € 2001 2002 EBITDA 1,519 1,436 Net interest expense 209 170 EBITDA / Net interest expense 7.3 8.4 Net debt 3,807 3,313 Equity, minority interests 4,356 4,119 Capital employed* 8,163 7,432 Net debt / capital
Slide 25: Pension Obligations - Different Systems
Linde Group 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‘ C
Slide 26: Pension Obligations
Linde Group Pension Obligations • Net Obligation: 1,156 Million € In Million € 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 Pro
Slide 27: Pension Related Expenses and Cash Payments
Linde Group Pension Related Expenses and Cash Payments 2001 2002 Pension Cash Pension Cash In Million € 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
Slide 28: Conversion of ROCE - Group
Linde Group Conversion of ROCE - Group old new +Interest expenses for pensions EBTA EBTA +Interest expenses +Interest expenses ROCE = + Pension Provisions Capital Capital employed employed Analysts‘ Conference 2003 Seite 27 28
Slide 29: Conversion of ROCE - Divisions
Linde Group 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 28 29
Slide 30: Gas: Figures
Linde Gas Figures In Million € 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‘ Confe
Slide 31: Sales by Segments
Linde Gas Sales by Segments* In Million € 2001 2002 ∆ Bulk 1,009 25% 1,039 26% + 3.0 % Cylinder 1,724 44% 1,672 42% - 3.0 % On-Site 703 18% 717 18% + 2.0 % Healthcare 532 13% 571 14% + 7.4 % * Not consolidated Analysts‘ Conference 2003 Seite 30 31
Slide 32: Healthcare: Institutional / Homecare
Linde Gas Healthcare: Institutional / Homecare – 464 Million € Sales in 2002 • Institutional (approx. 5 % annual growth rate est.) - Enhancement of marketing, sales & service efficiency - Differentiation by offering added value to doctors & pharmacists - Focus on therapies • Homecare (approx. 20 % a
Slide 33: Healthcare: INO
Linde Gas Healthcare: INO – 102 Million € Sales in 2002 (+ 26 %, ex currency + 32 %) • Revised sales expectations due to - slow start in Europe - one-year delay in the roll-out of new products INO 18 % • Annual growth of appx. 25 % for the upcoming 2 years - 2003e sales: > 120 million € - 2004e sale
Slide 34: Development Pipeline for New INO-based Applications
Linde Gas Healthcare: Development Pipeline for New INO-based Applications - Exp. Peak Sales of around 700 Million € 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 Chro
Slide 35: Linde Gas Restructuring Programs
Linde Gas Restructuring Programs – Cost Reduction of 275 Mio € by year-end 2004 • Reengineering of business processes • SG&A cost reduction • Purchasing • Reorganization of US-Gas business • Standardization of IT € 250 mio • Production / Distribution € 150 mio • Purchasing • Personnel € 100 mio 2000
Slide 36: Engineering: Figures
Linde Engineering Figures In Million € 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 35 36
Slide 37: Leading Market Positions in Most Activities
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% 200 mio €
Slide 38: Material Handling: Figures
Material Handling Figures In Million € 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‘ C
Slide 39: Figures by Brand
Material Handling Figures by Brand* Linde MH STILL OM Sales in million € 1,806 1,050 230 Orders Received in million € 1,850 1,047 265 Units sold 60,958 33,575 13,816 Employees 10,426 6,326 1,313 * Not consolidated Analysts‘ Conference 2003 Seite 38 39
Slide 40: Units Sold by Product Group
Material Handling Units Sold by Product Group* 2001 2002 Counterbalanced trucks 58,965 54,938 Warehouse trucks 54,257 50,841 * Consolidated Analysts‘ Conference 2003 Seite 39 40
Slide 41: Refrigeration: Figures
Refrigeration Figures In million € 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 40 41
Slide 42: Restructuring Program
Refrigeration Restructuring Program • 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 million € • Building of an additional plant in the Czech Republic • Personne
Slide 43: Maintained leading market position in all business fields
Linde Group Maintained leading market position in all business fields Europe World Linde Gas 1 5 Linde Engineering Market Leader* Material Handling 1 1 Refrigeration 1 2 Analysts‘ Analysts‘ Conference 2003 2003 Conference Seite 43
Slide 44: Investor Relations
Contact us Investor Relations Thomas Eisenlohr 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 42 44