Linde Plc · NASDAQ:LIN
Linde — HypoVereinsbank German Investment Conference 2005
31 slides from Linde's conference presentation, Sep 28, 2005
Slide 1: HypoVereinsbank German Investment Conference
Linde Group HypoVereinsbank German Investment Conference Munich, 28th September, 2005 Dr. Peter Diesch, CFO 1
Slide 2: Linde
Linde Group Linde Gas Engineering Material Handling Refrigeration Industrial Gases Air Separation Plants Counterbalanced Trucks Sold Hydrogen Plants Healthcare Warehouse Trucks 10/2004 Natural Gas Plants Ethylene Plants Hydraulic Systems 2
Slide 3: Linde is a portfolio driven company
Linde Group Linde is a portfolio driven company. Every Division must … — have a leading market position — be at least as good as its benchmarks (pure play companies) — have the potential for top-line growth — be able to generate free cash flow — be able to achieve defined ROCE targets 3
Slide 4: Leading market position in all activities
Linde Group Leading market position in all activities Business Segment Market Position Main Competitors Linde Gas No. 2 in Europe Air Liquide, BOC, No. 4 worldwide Praxair, Air Products Linde Engineering Top 1-3 position Air Liquide, Technip in all activities Material Handling No. 1 in Europe Toyota
Slide 5: Sales 2004: €9,421 million, EBITA 2004: €785 million
Linde Group Sales 2004: €9,421 million EBITA 2004: €785 million Refrigeration Refrigeration 6% Material 1% Handling 21% Gas 42% Material Engineering Handling 8% 35% Gas 70% Engineering 17% € billion 9.600 9.421 800 700 785 9.400 683 9.200 600 658 8.992 9.000 500 +10.1% CAGR 518 8.726 400 EBITA 8.800
Slide 6: A profitable company with a robust cash flow generation
Linde Group A profitable company with a robust cash flow generation 1500 1,281 1,249 1,145 891 1000 886 705 626 412 400 505 500 € million 10 0 -500 All Divisions generate positive Free Cash flow -4,034* -1000 1999 2000 2001 (IAS) 2002 (IAS) 2003 (IAS) 2004 (IAS) Operating cash flow Free cash flow be
Slide 7: Significant reduction of Net Debt and Gearing
Linde Group Significant reduction of Net Debt and Gearing Mid-term gearing target of 50% already achieved 4.000 88.60% 100% 90% 74.90% 3.500 80% 68.30% 62.50% 70% 3.000 57.70% 60% 48.22% € billion 2.500 50% 40% 2.000 3.659 30% 3.264 2.814 20% 1.500 2.342 2.430 1.968 10% 1.000 0% 1999 2000 2001 (IAS)
Slide 8: Ambitious ROCE targets are the drivers for profitable growth
Linde Group Ambitious ROCE targets are the drivers for profitable growth ROCE-targets: 2002 2003 2004 Target 2007/8 10% Group 7.0% 7.7% 9.5% (to be revised) Linde Gas 9.6% 10.1% 10.9% 13% Linde Engineering 13.3% 11.7%* 17.0% 16% Material Handling 8.7% 9.7% 12.0% 16% * Since 2003 based on new allocat
Slide 9: Linde outperformed DAX and DJ Europe Chemicals index, since Jan. 2003
Linde Group Linde outperformed DAX and DJ Europe Chemicals index, since Jan. 2003 Source: Bloomberg 9
Slide 10: Linde Gas
Linde Group Linde Gas 10
Slide 11: Linde Gas
Linde Group Linde Gas — Industry underlies a very stable growth trend (2-2.5 times GDP) — Leading market position — Highest profitability in the industry — Strong position in fast growing business segments: On-site, Healthcare — Growth focus on emerging markets Eastern Europe and Asia/Pacific 11
Slide 12: Linde Gas: FY 2004 sales - €4,003 million
Linde Group Linde Gas: FY 2004 sales - €4,003 million Asia 1.4% Australia / South America (2003: 0.8%) Africa1.1% 6.8% (2003: 1.0%) (2003: 6.2%) Germany 22.1% Sales Growth in H1 2005: (2003: 22.3%) Y-o-Y (excl. currency) North America Germany 5.8% 19.8% (2003: 21.3%) R of Europe 8.0% (6.5%) Rest of
Slide 13: Gas: EBITDA-margin at the leading edge within the industry
Linde Group Linde Gas: EBITDA-margin at the leading edge within the industry 28 27 26 EBITDA Margin (%) Linde 25 BOC Air Products 24 Air Liquide Praxair 23 22 21 2000 2001 2002 2003 2004 Source: Company reports, analyst reports 13
Slide 14: Linde Gas: Efficiency improvement & Growth initiatives
Linde Group Linde Gas: Efficiency improvement & Growth initiatives — „Fit-For-Future“ program will be completed this year and lead to total improvements of €150 million — Start of the „GAP“ program (Growth and Performance) in 2005 — 2/3 of initiatives focused on profitable growth — 1/3 of initiative
Slide 15: Linde Gas: Sales development 2000-2004 by Product Segments
Linde Group Linde Gas: Sales development 2000-2004 by Product Segments (Total sales, unconsolidated, € million) 4,144 +15.5% 3,466 634 15% +53.1% Sales Growth H1 2005: 12% 414 38% Y-o-Y (excl. currency) 1,568 45% -0.4% 1,575 On-site +24.4% (+24.8%) +26.4% 1,121 27% Bulk +9.0% (+8.1%) 26% 887 Cylinde
Slide 16: Linde Gas: Growth driver On-Site
Linde Group Linde Gas: Growth driver On-Site — High hurdle rates for new investments (IRR, ROCE) ensure high profitability — Stable business due to long-term take or pay contracts — Competitive advantage of Linde Engineering — Strong growth ahead: 14 start-ups in 2005/6, total Capex volume € 400 mil
Slide 17: Linde Gas: Healthcare - Growth driver with low capital intensity
Linde Group Linde Gas: Healthcare - Growth driver with low capital intensity — Top 3 global market position — EBITA margin (appx. 20%) above gas industry average — Low Capex ratio (1:1) supports growth — Focus on Homecare and Therapeutic Gases (CAGR in Healthcare > 10%) Sales split 2004 (€ million):
Slide 18: Focus on growth markets Eastern Europe and Asia/Pacific
Linde Group Focus on growth markets Eastern Europe and Asia/Pacific Eastern Europe: — Fastest growing region in Europe, ongoing double-digit growth rates — € 430 million sales in 2004 (target: CAGR >10%) — Dominant market position in key markets (market shares > 40%) — Strategy: Extension of market
Slide 19: Linde Engineering
Linde Group Linde Engineering 19
Slide 20: Linde Engineering
Linde Group Linde Engineering — Focussed player with Top 1-3 position in all product segments — Highest profitability in the industry — Business environment provides ongoing order inflow to strong backlog 20
Slide 21: Linde Engineering: A global business
Linde Group Linde Engineering: A global business Europe* 36% Goteborg Aldershot Dresden Paris Munich Pfungen Rome North America* Dalian Peking Tulsa Seoul 20% Blue Bell Middle East* Hangzhou 15% Baroda Asia/Pacific* Riyadh Abu Bangkok Dhabi 20% South America* Africa* Kuala Lumpur 3% 6% Engineering B
Slide 22: Linde Engineering: Highest profitability in the industry
Linde Group Linde Engineering: Highest profitability in the industry 2004 EBT margin 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% EBT Cagr 2002-04 -25% -15% -5% 5% 15% 25% 35% 45% 55% 65% -1,0% -2,0% -3,0% -4,0% -5,0% -6,0% -7,0% -8,0% -9,0% Linde Engineering Lurgi AG (excl. Lentjes, Zimmer AG) Technip (Onshore/Do
Slide 23: Linde Engineering: Strong business environment in all segments
Linde Group Linde Engineering: Strong business environment in all segments H1 2005 order intake: €902 million Key growth drivers (6-8% CAGR for all segments): • Air Separation: Middle East, China Olefins Others • Olefins: Middle East 13% 18% • Syngas: USA, China, Russia Natural Gas • Natural Gas: Mi
Slide 24: Material Handling
Linde Group Material Handling 24
Slide 25: Material Handling
Linde Group Material Handling — Megatrend in logistics driven by ongoing globalisation — European market leadership — Highest profitability in the industry — Successful multibrand strategy — Growth focus on high margin service business and fast growing regions 25
Slide 26: Material Handling: FY 2004 - €3,372 million sales, €191 million EBITA
Linde Group Material Handling: FY 2004 - €3,372 million sales, €191 million EBITA Sales 2004 by Region Sales and EBITA (€ million) Asia/Pacific Middle 6% East/Africa 4000 9% S. America 2% 3500 8% 1% N. America 3000 7% 3% 6% 2500 5% 2000 4% 1500 3% 1000 2% 500 1% 0 0% 1998 1999 2000 2001 2002 2003 20
Slide 27: Material Handling is ahead of peers concerning profitability
Linde Group Material Handling is ahead of peers concerning profitability (EBITA margins for FY 2004) 5.7% 6% 5.4% 5.2% 5% 3.6% 4% 3% 2% 1% 0% Linde Jungheinrich Toyota Nacco Source: Company data 27
Slide 28: Material Handling: Efficiency Improvement & Growth Initiatives
Linde Group Material Handling: Efficiency Improvement & Growth Initiatives — „TRIM“ program will be completed this year and lead to improvements of €150m — Start of the „GO“ program (Growth and Operational excellence) in 2005 — Focus on sustainable efficiency improvement in core processes — R & D, p
Slide 29: Material Handling: Focus on growth market China
Linde Group Material Handling: Focus on growth market China Today: — Market share in China: 9% A-Segment (Premium) — Local production facility — Dominant market position (M/S > 90%) Target market segment Tomorrow: B-Segment — New value truck (OM brand) (Value) — Market volume: appx. 14.000 units — C
Slide 30: Why invest in Linde?
Linde Group Why invest in Linde? — Market leader in all business segments — Focus on above average growth segments — Highest profitability within its peer group — Robust balance sheet supported by strong Free Cash Flow generation — ROCE targets drive clear strategy of profitable growth — Strong trac
Slide 31: What matters.
Linde Group What matters. Innovation. Internationality. Performance. 31
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