Linde Plc · NASDAQ:LIN
Linde — Non-Deal Roadshow (January 2005)
45 slides from Linde's roadshow presentation, Jan 12, 2005
Slide 1: Roadshow Toronto
Linde Group Roadshow Toronto January 12, 2005 Dr. Peter Diesch, CFO of Linde AG 1
Slide 2: 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 3: Who is Linde?
Linde Group Who is Linde? 3
Slide 4: Group structure (FY 2003), incl. Refrigeration
Linde Group Group structure (FY 2003), incl. Refrigeration Sales: € 8,992 million Ebita: € 671 million Refrigeration Refrigeration 9% Material 2% Handling 19% Linde Gas 43% Linde Material Engineering Handling 7% 34% Linde Gas Linde 72% Engineering 14% • Refrigeration Business sold to Carrier Corp. i
Slide 5: Linde today
Linde Group Linde today Linde Group Material Handling Gas Engineering Forklift Trucks Industrial Gases Air Separation Plants Hydrogen Plants Warehouse Trucks Healthcare Natural Gas Plants Hydraulic Systems Ethylene Plants Linde is a portfolio driven company. Every Division must …. • have a leading m
Slide 6: A market leader in all its activities
Linde Group A market leader in all its activties Business Segment Market Position Main Competitors Linde Gas No. 2 in Europe Air Liquide, BOC, No. 5 worldwide Praxair, Air Products Linde Engineering Top 1-3 position Air Liquide, Technip in all activities Material Handling No. 1 in Europe Toyota/BT,
Slide 7: A profitable company with a robust cash flow generation
Linde Group A profitable company with a robust cash flow generation 2000 1,115 1,145 1,281 1000 739 412 343 617 639 0 -170 € million -1000 -2000 All Divisions generate positive Free Cash flow -3000 -4000 -4,039* -5000 1999 2000 2001 (IAS) 2002 (IAS) 2003 (IAS) Operating Cash flow Free Cash flow befo
Slide 8: First 9 Months 2004 / Outlook
Linde Group First 9 Months 2004 / Outlook 8
Slide 9: First 9 months 2004: Positive trend continues
Linde Group First 9 months 2004: Positive trend continues • Sales up 8.8% to €6,903 million, excl. currency +10.5% (2003: €6,345 million) • EBITA before special items up 14.7% to €493 million, excl. currency +17.0% (2003: €430 m) • EPS of €1.28 (2003: €0.63), excl. Goodwill €2.11 (2003: €1.40) In €
Slide 10: First 9 months 2004: Group Key Financials
Linde Group First 9 months 2004: Group Key Financials • Higher Capex • Increased interest coverage ratio • Significantly improved gearing In € million 9M 03 9M 04 Operating cash flow 956 737 Capex (excl. financial assets) 566 713 Net interest -97 -97 EBITDA / Net interest 10.2 10.9% Net debt* 2,912
Slide 11: Outlook FY 2004
Linde Group Outlook FY 2004 Despite difficult economic environment we expect increased sales and operating profit for the Group • Group: Slight increase in sales and EBITA before special items (excl. Refrigeration) • Group: Capex (excl. financial assets) approx. €1bn (2003: €856m) • Linde Gas: Incre
Slide 12: Targets for Return on Capital Employed (RoCE)
Linde Group Targets for Return on Capital Employed (RoCE) RoCE 2002 2003 2005 Group 7.0% 7.7% 10% Linde Gas 9.6% 10.1% 11% Linde Engineering 13.3% 14.8% 16% Material Handling 8.7% 9.7% 16% 12
Slide 13: Net debt: Strong reduction over the last years, mid-term gearing target 50%
Linde Group Net debt: Strong reduction over the last years, mid-term gearing target 50% (Def. Net debt = Financial liabilities – Cash & cash equivalents and Securities) (Def. Gearing = Net debt / Equity) 100% 88,6% 90% 74,9% 80% 68,3% 62,5% 70% 60% € million 57,7% 58,9% 50% 40% 3,659 3,264 2,814 30%
Slide 14: Linde Gas
Linde LindeGroup Gas Linde Gas 14
Slide 15: Linde Gas 2003 Sales: Regions and Business Segments
Linde LindeGroup Gas 2003 Sales: € 3,843 million Regions Business Segments Asia/Pacific/ South Africa America 2% Healthcare 6% 15% North America Cylinder 21% 39% Bulk 27% Europe 71% On-site 19% 15
Slide 16: Linde Gas: First 9 months 2004
LindeGas Linde Group First 9 months 2004: • Sales up 2.4% to €2,958 million, excl. currency plus 5.4% (2003: €2,888m) • EBITA before special items +4.7% to €466 million, excl. currency +7.1% (2003: €445m) In € million Q3 04 ∆ 9M 04 ∆ Sales 1,014 4.6% 2,958 2.4% Sales (excl. currency) 6.7% 5.4% EBITD
Slide 17: First 9 months 2004: Sales by regions and products segments
Linde LindeGroup Gas First 9 months 2004: Sales by regions and products segments South Asia/Pacific America 65 Healthcare 203 Bulk Germany 468 827 654 North America 593 On-site 591 Rest of Europe Cylinder 1,443 1,172 € million € million YoY (excl. currency) YoY (excl. currency) Germany +0.8% Bulk +5
Slide 18: Improvement and Growth initiatives
Linde LindeGroup Gas Improvement and Growth initiatives • Efficiency improvement program „Fit-For-Future“ • Product segments: On-site and Healthcare • Regions: Eastern Europe and Asia/ Pacific 18
Slide 19: Fit-For-Future Program
Linde LindeGroup Gas Improvement & Growth initiatives (1): Fit-For-Future Program • €150 million fully effective in 2005 € million 2005 30 Procurement 10% 2004 Healthcare 70 13% Supply 50% 2003 50 SG&A 62% 19
Slide 20: Improvement & Growth initiatives (2): On-site
Linde LindeGroup Gas Improvement & Growth initiatives (2): On-site • Sales 2003: €772 million (2002: €725 million, +12% excluding currency) • Strong growth ahead (9 start-ups in 04/05, Capex: €400m, Sales appx. €200m) • High hurdle rates for new investments (IRR, ROCE) ensure high profitability • St
Slide 21: Improvement & Growth initiatives (3): Healthcare
Linde LindeGroup Gas Improvement & Growth initiatives (3): Healthcare • Sales 2003: €575 million (2002: €570 million, +11% excluding currency) • Ebita-margin (appx. 20%) above gas industry average • Top 3 global market position Sales split 2003 (€ million): Therapeutic Gases 104 Homecare 120 Institu
Slide 22: Improvement & Growth initiatives (3): Healthcare Strategy
Linde LindeGroup Gas Improvement & Growth initiatives (3): Healthcare Stategy: • Focus on Homecare market (mainly Europe) and Therapeutic Gases (INO, GEMI) • Annual sales growth target >10%, low Capex ratio (1:1) supports growth in Healthcare Homecare: Therapeutic Gases: • Market growth appx. 10% p.
Slide 23: Improvement & Growth initiatives (4): Eastern Europe
Linde LindeGroup Gas Improvement & Growth initiatives (4): Eastern Europe • Fastest growing region in Europe, double-digit growth rates predicted to continue • Linde sales 2003: €400 million (2002: €360 million, +11% excluding currency) • Dominant position: Market shares >> 40% in H, CZ, PL, ROM, SL
Slide 24: Improvement & Growth initiatives (5): Asia/Pacific
Linde LindeGroup Gas Improvement & Growth initiatives (5): Asia/Pacific • Sales 2003: €63 million (2002: €58 million, +15% excluding currency) • Top priority: China, selective growth in other countries • Focus on On-site • Annual sales growth target >10% incl. M&A activities China: • Well positioned
Slide 25: Linde Engineering
LindeEngineering Linde Group Linde Engineering 25
Slide 26: Linde Engineering 2003 Sales and Order Intake
LindeEngineering Linde Group 2003 Sales: € 1,270 million, 2003 Order intake: € 1,474 million Sales by Regions Order Intake by Business Segments Asia/Pacific/ Others Africa 16% ASU 31% 32% Europe 55% Natrural Gas South 28% America 1% Olefin 11% North America Syngas 13% 13% 26
Slide 27: Linde Engineering: First 9 months 2004
LindeEngineering Linde Group First 9 months 2004 • Sales increased by 30.5% to €1,035 million (2003: €793 million) • EBITA improved by 80% to €45 million (2003: €25 million) • Order intake €1.230 bn on high level of 2003 In € million Q3 04 ∆ 9M 04 ∆ Sales 408 58.8% 1,035 30.5% EBITDA 23 64.3% 56 40%
Slide 28: Strengths
LindeEngineering Linde Group Strenghts • Focussed player with Top 1-3 position in all product segments • Excellent order situation (2004 around €1.5 bn, backlog > €2.3 bn) • Promising project outlook for 2005 • Stable business development due to balanced portfolio of product segments • Excellent ris
Slide 29: Material Handling
Linde Group Material Handling Material Handling 29
Slide 30: Material Handling 2003 Sales: Regions and Unit Sales by Brand
Linde Group Material Handling 2003 Sales: € 3,063 million Regions Unit Sales by Brand (Total: 110,000) South Asia/Pacific/ America Africa OM Pimespo 1% 7% 13% North America 4% STILL 30% Linde 57% Europe 88% 30
Slide 31: Material Handling: First 9 months 2004
Linde Group Material Handling First 9 months 2004 • Sales increased by 12.6% to €2,413 million (2003: €2,143 million) • EBITA before special items up 23.6% to €110 million (2003: €89 million) In € million Q3 04 ∆ 9M 04 ∆ Sales 822 11.4% 2,413 12.6% EBITDA 119 11.2% 336 10.5% Margin 14.5% 13.9% EBITA
Slide 32: Improvement and Growth initiatives
Linde Group Material Handling Improvement and Growth initiatives • Efficiency improvement program „TRIM.“ • Product innovation in all product segments and across all brands • After sales service business and leasing • Regions: Eastern Europe and Asia/ Pacific 32
Slide 33: Improvement & Growth initiatives (1): TRIM. program
Linde Group Material Handling Improvement & Growth initiatives (1): TRIM. program • €150 million fully effective in 2005 2005 SG&A 50 17% Sales 2004 33% 70 Production & 2003 Quality 25% Procurement & 30 Logistics 25% 33
Slide 34: Improvement & Growth initiatives (2): Innovations
Linde Group Material Handling Improvement & Growth initiatives (2): Innovations Technology Logistic solutions Value Large scale product roll-out Counterbalanced 15 new basic models Trucks Warehouse Trucks 10 new basic models End of 2007 34
Slide 35: Improvement & Growth initiatives (3): Service Business
Linde Group Material Handling Improvement & Growth initiatives (3): Service Business - 2003: 39% of Sales (Target: >40%), > 50% of Profit - Service / Fleet New Spare Used Long-term Rental Leasing Mainte- manage- trucks Parts trucks warranties nance ment • Well positioned to control end-market Used T
Slide 36: Improvement & Growth initiatives (4): Eastern Europe, China
Linde Group Material Handling Improvement & Growth initiatives (4): Eastern Europe, China Eastern Europe • Strongest growing market in Europe, high growth rate in the high margin Counterbalanced truck business • Good market position in key markets • Strong growth pattern in the Counterbalanced Truck
Slide 37: Appendix
Linile Linde Group Appendix
Slide 38: Linde Group in € million
Linde Group Linde Group in € million 2002 2003 ∆ Order intake 9,322 9,079 - 2.6 % Sales 8,726 8,992 3.0 % EBITDA before special items 1,437 1,444 0.5 % EBITA before special items 648 671 3.5 % Special income 165 13 - 92.1 % Special expenses 166 140 - 15.7 % EBITA 647 544 - 15.9 % Goodwill 124 138 11
Slide 39: Linde Group in € million: Net Income
Linde Group Linde Group in € million 2002 2003 ∆ Net Income 240 108 - 55.0 % Earnings per share 2.01 0.91 - 54.7 % Earnings per share pre goodwill 3.05 2.06 - 32.5 % Cashflow from operating activities 1,145 1,281 11.9 % Cashflow per share 9.60 10.74 11.9 % Capex 913 967 5.9 % Capital employed 8,990
Slide 40: Special Items - €140 million in 2003
Linde Group Special Items - €140 million in 2003 Provisions taken in …. In € million Cost savings FY 02 Q3 03 Q4 03 Linde Gas 150 54 10 Refrigeration 25 21 TRIM. 150 62 40 Headquarters 20 Material Handling AUS 20 Transaction & disposal costs 50 Total 325 137 70 70 40
Slide 41: Pension Obligations – Net obligation €1,061 million
Linde Group Pension Obligations – Net obligation €1,061 million In € million 2003 Defined benefit obligation 1,857 Of which externally financed 940 Of which externally funded 917 Fair Value of plan assets -796 Net obligation 1,061 Unrecognized actuarial losses -148 Limitation (IAS 19.58) - Balance s
Slide 42: Pension Related Expenses and Cash Payments
Linde Group Pension Related Expenses and Cash Payments 2002 2003 Pension Cash Pension Cash expense payments expense payments In € million 1. Defined Benefits Plans Regular 100 74 111 88 (of which financial items) (53) (59) Special contribution 22 131 2. Defined Contribution Plans 6 6 12 12 Total 106
Slide 43: Definition: Return on Capital Employed (RoCE)
Linde Group Definition: Return on Capital Employed (RoCE) Group Divisions + Interest expenses for pensions + Interest expenses for pensions EBT EBITA EBIT + Interest expenses + Impairment Loss for Goodwill RoCE = + Pension provisions + Pension provisions + Goodwill Capital employed Operating Capital
Slide 44: Definition: Capital Employed (CE)
Linde Group Definition: Capital Employed (CE) Group + Linde Engineering: Equity incl. minority interests + Provisions for pensions + Financial liabilities Linde Gas + Material Handling: Equity incl. minority interests + Provisions for pensions + Financial liabilities (incl. those from financial serv
Slide 45: 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 Jo Raja Tel: +49 611 770 128 E-mail: jo.raja@linde.de 45