EX-99.1 2 linde_ex991.htm PRESS RELEASE linde_ex991.htm

EXHIBIT 99.1

 

 

Linde Reports First-Quarter 2024 Results

 

First-Quarter Highlights

 

 

➢

Sales $8.1 billion, down 1%, underlying sales up 1%

 

➢

Operating profit $2.1 billion, adjusted operating profit $2.3 billion, up 6%

 

➢

Operating profit margin 25.9%; adjusted operating profit margin 28.9%, up 200 basis points

 

➢

EPS $3.35, up 9%; adjusted EPS $3.75, up 10% YoY

 

➢

Full-year 2024 adjusted EPS guidance of $15.30 - $15.60 representing 8% to 10% growth year-over-year

 

Woking, UK, May 2, 2024 – Linde plc (Nasdaq: LIN) today reported first-quarter 2024 net income of $1,627 million and diluted earnings per share of $3.35, up 7% and 9% respectively.  Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,821 million, up 8% versus prior year.  Adjusted earnings per share was $3.75, 10% above prior year.

 

Linde’s sales for the first quarter were $8,100 million, down 1% versus prior year.  Compared to prior year, underlying sales increased 1% from 2% price attainment partially offset by 1% lower volumes largely driven by the manufacturing end market.

 

First-quarter operating profit was $2,095 million.  Adjusted operating profit of $2,341 million was up 6% versus prior year led by higher price and continued productivity initiatives across all segments.  Adjusted operating profit margin of 28.9% was 200 basis points above prior year and 130 basis points higher when excluding the effects of cost pass-through. 

 

First-quarter operating cash flow of $1,954 million increased 2% versus prior year.  After capital expenditures of $1,048 million, free cash flow was $906 million.  During the quarter, the company returned $1,694 million to shareholders through dividends and stock repurchases, net of issuances.

 

Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, “I’m proud of how the Linde team continues to deliver high-quality results despite economic headwinds.  We had another strong quarter, growing EPS 10%, ROC to 25.6% and expanding operating margins 200 basis points, reaching 28.9%. These results demonstrate the resiliency of our integrated industrial gas model through optimizing our network density, all while developing high-quality growth opportunities.”

 

Lamba continued, “Despite the uncertain economic environment, I remain confident in our ability to continue to create shareholder value through our proven operating model.”

 

For the second quarter of 2024, Linde expects adjusted diluted earnings per share in the range of $3.70 to $3.80, up 4% to 6% versus prior-year quarter or 5% to 7% when excluding 1% of estimated currency headwind.

 

For the full year 2024, the company expects adjusted diluted earnings per share to be in the range of $15.30 to $15.60, up 8% to 10% versus prior year or 9% to 11% when excluding 1% of estimated currency headwind.  Full-year capital expenditures are expected to be in the range of $4.0 billion to $4.5 billion to support growth and maintenance requirements including the $4.9 billion contractual sale of gas project backlog.

 

 
Page 1  of 10

 

 

 

First-Quarter 2024 Results by Segment

 

Americas sales of $3,560 million were flat versus prior-year quarter.  Compared with first quarter 2023, underlying sales increased 2% driven by 3% higher pricing partially offset by 1% lower volumes, primarily in the manufacturing and healthcare end markets.  Operating profit of $1,088 million was 30.6% of sales, 170 basis points above prior year and 110 basis points higher when excluding the effects of cost pass-through. 

 

APAC (Asia Pacific) sales of $1,591 million were flat versus prior year.  Compared with first quarter 2023, underlying sales grew 4% driven by 1% price attainment and 3% volume growth, primarily in the chemicals and electronics end markets, including project start-ups.  Operating profit of $447 million was 28.1% of sales, 160 basis points above prior year.  Year over year cost pass-through was immaterial.

 

EMEA (Europe, Middle East & Africa) sales of $2,091 million were down 4% versus prior year.  Compared with first quarter 2023, underlying sales grew 1%, driven by 3% higher pricing partially offset by 2% lower volumes, primarily in the manufacturing end market.  Operating profit of $687 million was 32.9% of sales, 500 basis points above prior year and 340 basis points higher when excluding the effects of cost pass-through. 

 

Linde Engineering sales were $539 million, flat versus prior year, and operating profit was $100 million or 18.6% of sales.  Order intake for the quarter was $364 million and third-party sale of equipment backlog was $3.4 billion.

 

Earnings Call

A teleconference on Linde’s first-quarter 2024 results is being held today at 9:00 am EDT. 

 

Live conference call

US Toll-Free Dial-In Number: 1 888 770 7292

UK Toll-Free Dial-In Number: 0800 358 0970

Access code: 6877110

Live webcast (listen-only)

https://www.linde.com/investors/financial-reports

 

Materials to be used in the teleconference are also available on the website.

 

About Linde

Linde is a leading global industrial gases and engineering company with 2023 sales of $33 billion.  We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain, decarbonize and protect our planet.

 

The company serves a variety of end markets such as chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases and technologies are used in countless applications including production of clean hydrogen and carbon capture systems critical to the energy transition, life-saving medical oxygen and high-purity & specialty gases for electronics. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.

 

For more information about the company and its products and services, please visit www.linde.com

 

Adjusted amounts, free cash flow and return on capital are non-GAAP measures.  See the attachments for a summary of non-GAAP reconciliations and calculations for adjusted amounts. 

 

 
Page 2 of 10

 

 

 

Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.

 

*Note: We are providing adjusted earnings per share (“EPS”) guidance for 2024. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.

 

Forward-looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions.  They are based on management’s reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties.  These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19 and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business.  These risks and uncertainties may cause future results or circumstances to differ materially from adjusted projections, estimates or other forward-looking statements.

 

Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances.  The above listed risks and uncertainties are further described in Item 1A.  Risk Factors in Linde plc’s Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 28, 2024 which should be reviewed carefully. Please consider Linde plc’s forward-looking statements in light of those risks.

 

 
Page 3 of 10

 

 

LINDE PLC AND SUBSIDIARIES

SUMMARY NON-GAAP RECONCILIATIONS

(UNAUDITED)

 

The following adjusted amounts are Non-GAAP measures and are intended to supplement investors' understanding of the company's financial statements by providing measures which investors, financial analysts and management use to help evaluate the company's operating performance. Items which the company does not believe to be indicative of ongoing business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis. Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures. See the "NON GAAP MEASURES AND RECONCILIATIONS" starting on page 9 for additional details relating to the adjustments.

 

(Millions of dollars, except per share amounts)

 

Sales

 

 

Operating Profit

 

 

Net Income

 

 

Diluted EPS

 

Quarter Ended March 31

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Reported GAAP Amounts

 

 $ 8,100

 

 

 $ 8,193

 

 

 $ 2,095

 

 

 $ 1,933

 

 

 $ 1,627

 

 

 $ 1,516

 

 

 $ 3.35

 

 

 $ 3.06

 

Other charges (a)

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 18

 

 

 

 (5 )

 

 

 (27 )

 

 

 (0.01 )

 

 

 (0.05 )

Purchase accounting impacts - Linde AG (b)

 

 

 —

 

 

 

 —

 

 

 

 246

 

 

 

 255

 

 

 

 199

 

 

 

 204

 

 

 

 0.41

 

 

 

 0.41

 

Total adjustments

 

 

 —

 

 

 

 —

 

 

 

 246

 

 

 

 273

 

 

 

 194

 

 

 

 177

 

 

 

 0.40

 

 

 

 0.36

 

Adjusted amounts

 

 $ 8,100

 

 

 $ 8,193

 

 

 $ 2,341

 

 

 $ 2,206

 

 

 $ 1,821

 

 

 $ 1,693

 

 

 $ 3.75

 

 

 $ 3.42

 

 

(a) 2023 year to date charges related primarily to costs associated with the delisting, more than offset by net tax benefits.

 

(b) To adjust for purchase accounting impacts related to the merger.

 

 
Page 4 of 10

 

 

LINDE PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

 

 

 

Quarter Ended March 31,

 

(Millions of dollars, except per share data)

 

2024

 

 

2023

 

Sales

 

 $ 8,100

 

 

 $ 8,193

 

Cost of sales

 

 

 4,216

 

 

 

 4,431

 

Selling, general and administrative

 

 

 860

 

 

 

 822

 

Depreciation and amortization

 

 

 949

 

 

 

 948

 

Research and development

 

 

 38

 

 

 

 36

 

Other charges

 

 

 —

 

 

 

 18

 

Other income (expense) - net

 

 

 58

 

 

 

 (5 )

Operating Profit

 

 

 2,095

 

 

 

 1,933

 

Interest expense - net

 

 

 65

 

 

 

 37

 

Net pension and OPEB cost (benefit), excluding service cost

 

 

 (50 )

 

 

 (45 )

Income Before Income Taxes and Equity Investments

 

 

 2,080

 

 

 

 1,941

 

Income taxes

 

 

 463

 

 

 

 430

 

Income Before Equity Investments

 

 

 1,617

 

 

 

 1,511

 

Income from equity investments

 

 

 48

 

 

 

 41

 

Income (Including Noncontrolling Interests)

 

 

 1,665

 

 

 

 1,552

 

Less: noncontrolling interests

 

 

 (38 )

 

 

 (36 )

Net Income – Linde plc

 

 $ 1,627

 

 

 $ 1,516

 

 

 

 

 

 

 

 

 

 

Per Share Data – Linde plc Shareholders

 

 

 

 

 

 

 

 

Basic earnings per share

 

 $ 3.38

 

 

 $ 3.08

 

Diluted Earnings per share

 

 $ 3.35

 

 

 $ 3.06

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

 $ 1.39

 

 

 $ 1.275

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding (000’s):

 

 

 

 

 

 

 

 

Basic shares outstanding (000's)

 

 

 481,949

 

 

 

 491,817

 

Diluted shares outstanding (000's)

 

 

 485,592

 

 

 

 495,676

 

Note: See page 9 for a reconciliation to adjusted amounts which are Non-GAAP.

 

 
Page 5 of 10

 

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

 

 

March 31,

 

 

December 31,

 

(Millions of dollars)

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

 $ 4,848

 

 

 $ 4,664

 

Accounts receivable - net

 

 

 5,009

 

 

 

 4,718

 

Contract assets

 

 

 217

 

 

 

 196

 

Inventories

 

 

 2,100

 

 

 

 2,115

 

Prepaid and other current assets

 

 

 928

 

 

 

 927

 

Total Current Assets

 

 

 13,102

 

 

 

 12,620

 

Property, plant and equipment - net

 

 

 24,418

 

 

 

 24,552

 

Goodwill

 

 

 26,289

 

 

 

 26,751

 

Other intangibles - net

 

 

 12,001

 

 

 

 12,399

 

Other long-term assets

 

 

 4,537

 

 

 

 4,489

 

Total Assets

 

 $ 80,347

 

 

 $ 80,811

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Accounts payable

 

 $ 2,885

 

 

 $ 3,020

 

Short-term debt

 

 

 4,046

 

 

 

 4,713

 

Current portion of long-term debt

 

 

 1,046

 

 

 

 1,263

 

Contract liabilities

 

 

 1,827

 

 

 

 1,901

 

Other current liabilities

 

 

 4,585

 

 

 

 4,820

 

Total Current Liabilities

 

 

 14,389

 

 

 

 15,717

 

Long-term debt

 

 

 15,227

 

 

 

 13,397

 

Other long-term liabilities

 

 

 10,502

 

 

 

 10,602

 

Total Liabilities

 

 $ 40,118

 

 

 $ 39,716

 

Redeemable noncontrolling interests

 

 

 13

 

 

 

 13

 

Linde plc Shareholders’ Equity

 

 

 

 

 

 

 

 

Ordinary shares

 

 

 1

 

 

 

 1

 

Additional paid-in capital

 

 

 39,570

 

 

 

 39,812

 

Retained earnings

 

 

 9,708

 

 

 

 8,845

 

Accumulated other comprehensive income (loss)

 

 

 (6,528 )

 

 

 (5,805 )

Less: Treasury shares, at cost

 

 

 (3,922 )

 

 

 (3,133 )

Total Linde plc Shareholders' Equity

 

 

 38,829

 

 

 

 39,720

 

Noncontrolling interests

 

 

 1,387

 

 

 

 1,362

 

Total Equity

 

 $ 40,216

 

 

 $ 41,082

 

Total Liabilities and Equity

 

 $ 80,347

 

 

 $ 80,811

 

 

 
Page 6 of 10

 

 

LINDE PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

 

 

 

Quarter Ended March 31,

 

(Millions of dollars)

 

2024

 

 

2023

 

Operations

 

 

 

 

 

 

Net income - Linde plc

 

 $ 1,627

 

 

 $ 1,516

 

Add: noncontrolling interests

 

 

 38

 

 

 

 36

 

Net income (including noncontrolling interests)

 

 

 1,665

 

 

 

 1,552

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Other charges, net of payments (a)

 

 

 (55 )

 

 

 (61 )

Depreciation and amortization

 

 

 949

 

 

 

 948

 

Accounts receivable

 

 

 (361 )

 

 

 (131 )

Contract assets and liabilities, net

 

 

 (50 )

 

 

 (66 )

Inventory

 

 

 (27 )

 

 

 (59 )

Payables and accruals

 

 

 (65 )

 

 

 (64 )

Pension contributions

 

 

 (11 )

 

 

 (10 )

Deferred income taxes and other

 

 

 (91 )

 

 

 (201 )

Net cash provided by (used for) operating activities

 

 

 1,954

 

 

 

 1,908

 

Investing

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 (1,048 )

 

 

 (829 )

Acquisitions, net of cash acquired

 

 

 —

 

 

 

 (808 )

Divestitures, net of cash divested and asset sales

 

 

 7

 

 

 

 3

 

Net cash provided by (used for) investing activities

 

 

 (1,041 )

 

 

 (1,634 )

Financing

 

 

 

 

 

 

 

 

Debt increase (decrease) - net

 

 

 1,215

 

 

 

 717

 

Issuances of ordinary shares

 

 

 16

 

 

 

 13

 

Purchases of ordinary shares

 

 

 (1,041 )

 

 

 (859 )

Cash dividends - Linde plc shareholders

 

 

 (669 )

 

 

 (623 )

Noncontrolling interest transactions and other

 

 

 (189 )

 

 

 (12 )

Net cash provided by (used for) financing activities

 

 

 (668 )

 

 

 (764 )

Effect of exchange rate changes on cash and cash equivalents

 

 

 (61 )

 

 

 16

 

Change in cash and cash equivalents

 

 

 184

 

 

 

 (474 )

Cash and cash equivalents, beginning-of-period

 

 

 4,664

 

 

 

 5,436

 

Cash and cash equivalents, end-of-period

 

 $ 4,848

 

 

 $ 4,962

 

 

(a) There were no other charges for the three months ended March 31, 2024 and other charges were $18 million for the respective 2023 period. Related cash outflows were $55 million and $79 million for the same respective period.

 

 
Page 7 of 10

 

 

LINDE PLC AND SUBSIDIARIES

SEGMENT INFORMATION

(UNAUDITED)

 

 

 

Quarter Ended March 31,

 

(Millions of dollars)

 

2024

 

 

2023

 

Sales

 

 

 

 

 

 

Americas

 

 $ 3,560

 

 

 $ 3,551

 

EMEA

 

 

 2,091

 

 

 

 2,177

 

APAC

 

 

 1,591

 

 

 

 1,598

 

Engineering

 

 

 539

 

 

 

 540

 

Other

 

 

 319

 

 

 

 327

 

Total segment sales

 

 $ 8,100

 

 

 $ 8,193

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

 

 

 

 

 

 

 

Americas

 

 $ 1,088

 

 

 $ 1,025

 

EMEA

 

 

 687

 

 

 

 607

 

APAC

 

 

 447

 

 

 

 423

 

Engineering

 

 

 100

 

 

 

 149

 

Other

 

 

 19

 

 

 

 2

 

Segment operating profit

 

 

 2,341

 

 

 

 2,206

 

Other charges

 

 

 —

 

 

 

 (18 )

Purchase accounting impacts - Linde AG

 

 

 (246 )

 

 

 (255 )

Total operating profit

 

 $ 2,095

 

 

 $ 1,933

 

 

 
Page 8 of 10

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(UNAUDITED)

 

The following Non-GAAP measures are intended to supplement investors’ understanding of the company’s financial information by providing measures which investors, financial analysts and management use to help evaluate the company’s operating performance and liquidity.  Items which the company does not believe to be indicative of on-going business trends are excluded from these calculations so that investors can better evaluate and analyze historical and future business trends on a consistent basis.  Definitions of these Non-GAAP measures may not be comparable to similar definitions used by other companies and are not a substitute for similar GAAP measures.

 

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Operating Profit and Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating profit

 

 $ 2,095

 

 

 $ 2,028

 

 

 $ 2,052

 

 

 $ 2,011

 

 

 $ 1,933

 

Add: Other charges (a)

 

 

 —

 

 

 

 (2 )

 

 

 2

 

 

 

 22

 

 

 

 18

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 246

 

 

 

 246

 

 

 

 252

 

 

 

 253

 

 

 

 255

 

Total adjustments

 

 $ 246

 

 

 $ 244

 

 

 $ 254

 

 

 $ 275

 

 

 $ 273

 

Adjusted operating profit

 

 $ 2,341

 

 

 $ 2,272

 

 

 $ 2,306

 

 

 $ 2,286

 

 

 $ 2,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

 8 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage change

 

 

 6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

 $ 8,100

 

 

 $ 8,302

 

 

 $ 8,155

 

 

 $ 8,204

 

 

 $ 8,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported operating margin

 

 

 25.9 %

 

 

 24.4 %

 

 

 25.2 %

 

 

 24.5 %

 

 

 23.6 %

Adjusted operating margin

 

 

 28.9 %

 

 

 27.4 %

 

 

 28.3 %

 

 

 27.9 %

 

 

 26.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported depreciation and amortization

 

 $ 949

 

 

 $ 949

 

 

 $ 959

 

 

 $ 960

 

 

 $ 948

 

Less: Purchase accounting impacts - Linde AG (c)

 

 

 (240 )

 

 

 (241 )

 

 

 (249 )

 

 

 (251 )

 

 

 (250 )

Adjusted depreciation and amortization

 

 $ 709

 

 

 $ 708

 

 

 $ 710

 

 

 $ 709

 

 

 $ 698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Other Income (Expense) - net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Other Income (Expense) - net

 

 $ 58

 

 

 $ (25 )

 

 $ 16

 

 

 $ (27 )

 

 $ (5 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 (6 )

 

 

 (5 )

 

 

 (3 )

 

 

 (2 )

 

 

 (5 )

Adjusted Other Income (Expense) - net

 

 $ 64

 

 

 $ (20 )

 

 $ 19

 

 

 $ (25 )

 

 $ —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Pension and OPEB Cost (Benefit), Excluding Service Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net pension and OPEB cost (benefit), excluding service cost

 

 $ (50 )

 

 $ (39 )

 

 $ (35 )

 

 $ (45 )

 

 $ (45 )

Add: Pension settlement charges

 

 

 —

 

 

 

 (4 )

 

 

 (12 )

 

 

 —

 

 

 

 —

 

Adjusted Net Pension and OPEB cost (benefit), excluding service costs

 

 $ (50 )

 

 $ (43 )

 

 $ (47 )

 

 $ (45 )

 

 $ (45 )

 

 
Page 9 of 10

 

 

 

 

2024

 

 

 

 

 

 

2023

 

 

 

(Millions of dollars)

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Interest Expense - Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported interest expense - net

 

 $ 65

 

 

 $ 71

 

 

 $ 40

 

 

 $ 52

 

 

 $ 37

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 2

 

 

 

 1

 

 

 

 2

 

 

 

 4

 

 

 

 9

 

Adjusted interest expense - net

 

 $ 67

 

 

 $ 72

 

 

 $ 42

 

 

 $ 56

 

 

 $ 46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Income Taxes (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income taxes

 

 $ 463

 

 

 $ 459

 

 

 $ 487

 

 

 $ 438

 

 

 $ 430

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 60

 

 

 

 49

 

 

 

 59

 

 

 

 67

 

 

 

 57

 

Add: Pension settlement charges

 

 

 —

 

 

 

 1

 

 

 

 2

 

 

 

 —

 

 

 

 —

 

Add: Other charges (a)

 

 

 5

 

 

 

 2

 

 

 

 —

 

 

 

 34

 

 

 

 45

 

Total adjustments

 

 

 65

 

 

 

 52

 

 

 

 61

 

 

 

 101

 

 

 

 102

 

Adjusted income taxes

 

 $ 528

 

 

 $ 511

 

 

 $ 548

 

 

 $ 539

 

 

 $ 532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Effective Tax Rate (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income before income taxes and equity investments

 

 $ 2,080

 

 

 $ 1,996

 

 

 $ 2,047

 

 

 $ 2,004

 

 

 $ 1,941

 

Add: Pension settlement charge

 

 

 —

 

 

 

 4

 

 

 

 12

 

 

 

 —

 

 

 

 —

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 244

 

 

 

 245

 

 

 

 250

 

 

 

 249

 

 

 

 246

 

Add: Other charges (a)

 

 

 —

 

 

 

 (2 )

 

 

 2

 

 

 

 22

 

 

 

 18

 

Total adjustments

 

 

 244

 

 

 

 247

 

 

 

 264

 

 

 

 271

 

 

 

 264

 

Adjusted income before income taxes and equity investments

 

 $ 2,324

 

 

 $ 2,243

 

 

 $ 2,311

 

 

 $ 2,275

 

 

 $ 2,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Income taxes

 

 $ 463

 

 

 $ 459

 

 

 $ 487

 

 

 $ 438

 

 

 $ 430

 

Reported effective tax rate

 

 

 22.3 %

 

 

 23.0 %

 

 

 23.8 %

 

 

 21.9 %

 

 

 22.2 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income taxes

 

 $ 528

 

 

 $ 511

 

 

 $ 548

 

 

 $ 539

 

 

 $ 532

 

Adjusted effective tax rate

 

 

 22.7 %

 

 

 22.8 %

 

 

 23.7 %

 

 

 23.7 %

 

 

 24.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported income from equity investments

 

 $ 48

 

 

 $ 39

 

 

 $ 41

 

 

 $ 46

 

 

 $ 41

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 18

 

 

 

 18

 

 

 

 18

 

 

 

 18

 

 

 

 18

 

Adjusted income from equity investments

 

 $ 66

 

 

 $ 57

 

 

 $ 59

 

 

 $ 64

 

 

 $ 59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Noncontrolling Interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported noncontrolling interests

 

 $ (38 )

 

 $ (33 )

 

 $ (36 )

 

 $ (37 )

 

 $ (36 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 (3 )

 

 

 (3 )

 

 

 (3 )

 

 

 (3 )

 

 

 (3 )

Adjusted noncontrolling interests

 

 $ (41 )

 

 $ (36 )

 

 $ (39 )

 

 $ (40 )

 

 $ (39 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income - Linde plc (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income

 

 $ 1,627

 

 

 $ 1,543

 

 

 $ 1,565

 

 

 $ 1,575

 

 

 $ 1,516

 

Add: Pension settlement charge

 

 

 —

 

 

 

 3

 

 

 

 10

 

 

 

 —

 

 

 

 —

 

Add: Other charges (a)

 

 

 (5 )

 

 

 (4 )

 

 

 2

 

 

 

 (12 )

 

 

 (27 )

Add: Purchase accounting impacts - Linde AG (c)

 

 

 199

 

 

 

 211

 

 

 

 206

 

 

 

 197

 

 

 

 204

 

Total adjustments

 

 

 194

 

 

 

 210

 

 

 

 218

 

 

 

 185

 

 

 

 177

 

Adjusted net income - Linde plc

 

 $ 1,821

 

 

 $ 1,753

 

 

 $ 1,783

 

 

 $ 1,760

 

 

 $ 1,693

 

 

 
Page 9 of 10 cont’d

 

 

 

 

 

2024

 

 

2023

 

(Millions of dollars, except per share data)

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Adjusted Diluted EPS (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported diluted EPS

 

 $ 3.35

 

 

 $ 3.16

 

 

 $ 3.19

 

 

 $ 3.19

 

 

 $ 3.06

 

Add: Pension settlement charge

 

 

 —

 

 

 

 0.01

 

 

 

 0.02

 

 

 

 —

 

 

 

 —

 

Add: Other charges (a)

 

 

 (0.01 )

 

 

 (0.01 )

 

 

 —

 

 

 

 (0.02 )

 

 

 (0.05 )

Add:  Purchase accounting impacts - Linde AG (c)

 

 

 0.41

 

 

 

 0.43

 

 

 

 0.42

 

 

 

 0.40

 

 

 

 0.41

 

Total adjustments

 

 

 0.40

 

 

 

 0.43

 

 

 

 0.44

 

 

 

 0.38

 

 

 

 0.36

 

Adjusted diluted EPS

 

 $ 3.75

 

 

 $ 3.59

 

 

 $ 3.63

 

 

 $ 3.57

 

 

 $ 3.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported percentage change

 

 

 9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted percentage change

 

 

 10 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2024

 

 

Full Year 2024 

 

Adjusted Diluted EPS Guidance (d)

 

 

 

 

 

Low End

 

 

High End

 

 

Low End

 

 

High End

 

2024 Adjusted Guidance

 

 

 

 

 

 $ 3.70

 

 

 $ 3.80

 

 

 $ 15.30

 

 

 $ 15.60

 

Adjusted percentage changes versus 2023 adjusted diluted EPS

 

 

 

 

 

 

 4 %

 

 

 6 %

 

 

 8 %

 

 

 10 %

Add: Estimated currency headwind/(tailwind)

 

 

 

 

 

 

 1 %

 

 

 1 %

 

 

 1 %

 

 

 1 %

Adjusted percentage change excluding currency

 

 

 

 

 

 

 5 %

 

 

 7 %

 

 

 9 %

 

 

 11 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA and % of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income - Linde plc

 

 $ 1,627

 

 

 $ 1,543

 

 

 $ 1,565

 

 

 $ 1,575

 

 

 $ 1,516

 

Add: Noncontrolling interests

 

 

 38

 

 

 

 33

 

 

 

 36

 

 

 

 37

 

 

 

 36

 

Add: Net pension and OPEB cost (benefit), excluding service cost

 

 

 (50 )

 

 

 (39 )

 

 

 (35 )

 

 

 (45 )

 

 

 (45 )

Add: Interest expense

 

 

 65

 

 

 

 71

 

 

 

 40

 

 

 

 52

 

 

 

 37

 

Add: Income taxes

 

 

 463

 

 

 

 459

 

 

 

 487

 

 

 

 438

 

 

 

 430

 

Add: Depreciation and amortization

 

 

 949

 

 

 

 949

 

 

 

 959

 

 

 

 960

 

 

 

 948

 

EBITDA

 

 

 3,092

 

 

 

 3,016

 

 

 

 3,052

 

 

 

 3,017

 

 

 

 2,922

 

Add: Other charges (a)

 

 

 —

 

 

 

 (2 )

 

 

 2

 

 

 

 22

 

 

 

 18

 

Add: Purchase accounting impacts - Linde AG (c)

 

 

 24

 

 

 

 23

 

 

 

 20

 

 

 

 20

 

 

 

 23

 

Total adjustments

 

 

 24

 

 

 

 21

 

 

 

 22

 

 

 

 42

 

 

 

 41

 

Adjusted EBITDA

 

 $ 3,116

 

 

 $ 3,037

 

 

 $ 3,074

 

 

 $ 3,059

 

 

 $ 2,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported sales

 

 $ 8,100

 

 

 $ 8,302

 

 

 $ 8,155

 

 

 $ 8,204

 

 

 $ 8,193

 

% of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 38.2 %

 

 

 36.3 %

 

 

 37.4 %

 

 

 36.8 %

 

 

 35.7 %

Adjusted EBITDA as a % of Sales

 

 

 38.5 %

 

 

 36.6 %

 

 

 37.7 %

 

 

 37.3 %

 

 

 36.2 %

 

 
Page 9 of 10 cont’d

 

 

(a)  The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

 

(b)  Net of income taxes which are shown separately in  “Adjusted Income Taxes and Effective Tax Rate”.

 

(c)  The company believes that its non-GAAP measures excluding Purchase accounting impacts - Linde AG are useful to investors because: (i) the 2018 business combination was a merger of equals in an all-stock merger transaction, with no cash consideration, (ii)  the company is managed on a geographic basis and the results of certain geographies are more heavily impacted by purchase accounting than others, causing results that are not comparable at the reportable segment level, therefore, the impacts of purchasing accounting adjustments to each segment vary and are not comparable within the company and when compared to other companies in similar regions, (iii) business management is evaluated and variable compensation is determined based on results excluding purchase accounting impacts, and; (iv) it is important to investors and analysts to understand the purchase accounting impacts to the financial statements.

 

A summary of each of the adjustments made for Purchase accounting impacts - Linde AG are as follows:

Adjusted Operating Profit and Margin:  The purchase accounting adjustments for the periods presented relate primarily to depreciation and amortization related to the fair value step up of fixed assets and intangible assets (primarily customer related) acquired in the merger and the allocation of fair value step-up for ongoing Linde AG asset disposals (reflected in Other Income/(Expense)).

Adjusted Interest Expense - Net: Relates to the amortization of the fair value of debt acquired in the merger.

Adjusted Income Taxes and Effective Tax Rate:  Relates to the current and deferred income tax impact on the adjustments discussed above.  The income tax expense (benefit) on the non-GAAP pre-tax adjustments was determined using the applicable tax rates for the jurisdictions that were utilized in calculating the GAAP income tax expense (benefit) and included both current and deferred income tax amounts.

Adjusted Income from Equity Investments:  Represents the amortization of increased fair value on equity investments related to depreciable and amortizable assets. 

Adjusted Noncontrolling Interests: Represents the noncontrolling interests’ ownership portion of the adjustments described above determined on an entity by entity basis.

 

(d) We are providing adjusted earnings per share (“EPS”) guidance for 2024. This is a non-GAAP financial measure that represents diluted earnings per share (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges and the impact of potential divestitures or other potentially significant items.  Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.

 

 
Page 9 of 10 cont’d

 

 

 

LINDE PLC AND SUBSIDIARIES

APPENDIX

NON-GAAP MEASURES AND RECONCILIATIONS

(UNAUDITED)

 

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

 

 

 

 

 

 

 

 

 

 

 

Free Cash Flow (FCF) - Free cash flow is a measure used by investors, financial analysts and management to evaluate the ability of a company to pursue opportunities that enhance shareholder value. FCF equals cash flow from operations less capital expenditures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Cash Flow

 

 $ 1,954

 

 

 $ 2,727

 

 

 $ 2,520

 

 

 $ 2,150

 

 

 $ 1,908

 

Less: Capital Expenditures

 

 

 (1,048 )

 

 

 (1,151 )

 

 

 (948 )

 

 

 (859 )

 

 

 (829 )

Free Cash Flow

 

 $ 906

 

 

 $ 1,576

 

 

 $ 1,572

 

 

 $ 1,291

 

 

 $ 1,079

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Debt - Net debt is a financial liquidity metric used by investors, financial analysts and management to evaluate the ability of a company to repay its debt and is calculated as total debt (excluding purchase accounting impacts) less liquid assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

 $ 20,319

 

 

 $ 19,373

 

 

 $ 18,003

 

 

 $ 17,490

 

 

 $ 18,777

 

Less: Cash and cash equivalents

 

 

 (4,848 )

 

 

 (4,664 )

 

 

 (3,894 )

 

 

 (3,357 )

 

 

 (4,962 )

Net debt

 

 

 15,471

 

 

 

 14,709

 

 

 

 14,109

 

 

 

 14,133

 

 

 

 13,815

 

Less: Purchase accounting impacts - Linde AG

 

 

 (5 )

 

 

 (7 )

 

 

 (8 )

 

 

 (10 )

 

 

 (13 )

Adjusted net debt

 

 $ 15,466

 

 

 $ 14,702

 

 

 $ 14,101

 

 

 $ 14,123

 

 

 $ 13,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After-tax Return on Capital and Adjusted After-tax Return on Capital (ROC) - After-tax return on capital is a measure used by investors, financial analysts and management to evaluate the return on net assets employed in the business. ROC measures the after-tax operating profit that the company was able to generate with the investments made by all parties in the business (debt, noncontrolling interests and Linde plc Shareholders’ Equity).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported net income - Linde plc

 

 $ 1,627

 

 

 $ 1,543

 

 

 $ 1,565

 

 

 $ 1,575

 

 

 $ 1,516

 

Add: noncontrolling interests

 

 

 38

 

 

 

 33

 

 

 

 36

 

 

 

 37

 

 

 

 36

 

Add: interest expense - net

 

 

 65

 

 

 

 71

 

 

 

 40

 

 

 

 52

 

 

 

 37

 

Less: tax benefit on interest expense - net *

 

 

 (16 )

 

 

 (16 )

 

 

 (12 )

 

 

 (12 )

 

 

 (9 )

Reported NOPAT

 

 $ 1,714

 

 

 $ 1,631

 

 

 $ 1,629

 

 

 $ 1,652

 

 

 $ 1,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income - Linde plc

 

 $ 1,821

 

 

 $ 1,753

 

 

 $ 1,783

 

 

 $ 1,760

 

 

 $ 1,693

 

Add: adjusted noncontrolling interests

 

 

 41

 

 

 

 36

 

 

 

 39

 

 

 

 40

 

 

 

 39

 

Add: adjusted interest expense - net

 

 

 67

 

 

 

 72

 

 

 

 42

 

 

 

 56

 

 

 

 46

 

Less: tax benefit on interest expense - net *

 

 

 (17 )

 

 

 (17 )

 

 

 (13 )

 

 

 (13 )

 

 

 (11 )

Adjusted NOPAT

 

 $ 1,912

 

 

 $ 1,844

 

 

 $ 1,851

 

 

 $ 1,843

 

 

 $ 1,767

 

*Tax benefit on interest expense - net is generally presented using the reported effective rate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4-quarter trailing reported NOPAT

 

 $ 6,626

 

 

 $ 6,492

 

 

 $ 6,246

 

 

 $ 5,930

 

 

 $ 4,692

 

4-quarter trailing adjusted NOPAT

 

 $ 7,450

 

 

 $ 7,305

 

 

 $ 7,101

 

 

 $ 6,863

 

 

 $ 6,638

 

 

 
Page 10 of 10

 

 

 

 

2024

 

 

2023

 

(Millions of dollars)

 

Q1

 

 

Q4

 

 

Q3

 

 

Q2

 

 

Q1

 

Equity and redeemable noncontrolling interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 $ 13

 

 

 $ 13

 

 

 $ 13

 

 

 $ 13

 

 

 $ 13

 

Linde plc shareholders' equity

 

 

 38,829

 

 

 

 39,720

 

 

 

 38,898

 

 

 

 39,911

 

 

 

 39,970

 

Noncontrolling interests

 

 

 1,387

 

 

 

 1,362

 

 

 

 1,327

 

 

 

 1,324

 

 

 

 1,353

 

Total equity and redeemable noncontrolling interests

 

 $ 40,229

 

 

 $ 41,095

 

 

 $ 40,238

 

 

 $ 41,248

 

 

 $ 41,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported capital

 

 $ 55,700

 

 

 $ 55,804

 

 

 $ 54,347

 

 

 $ 55,381

 

 

 $ 55,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity and redeemable noncontrolling interests

 

 $ 40,229

 

 

 $ 41,095

 

 

 $ 40,238

 

 

 $ 41,248

 

 

 $ 41,336

 

Add: Adjusted net debt

 

 

 15,466

 

 

 

 14,702

 

 

 

 14,101

 

 

 

 14,123

 

 

 

 13,802

 

Less: Linde AG Goodwill (a)

 

 

 24,256

 

 

 

 24,256

 

 

 

 24,256

 

 

 

 24,256

 

 

 

 24,256

 

Less: Linde AG Indefinite lived intangibles (a)

 

 

 1,868

 

 

 

 1,868

 

 

 

 1,868

 

 

 

 1,868

 

 

 

 1,868

 

Adjusted capital

 

 $ 29,571

 

 

 $ 29,673

 

 

 $ 28,215

 

 

 $ 29,247

 

 

 $ 29,014

 

(a) Represent opening balance sheet purchase accounting impacts of non-amortizing assets related to the Linde AG merger.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending capital (see above)

 

 $ 55,700

 

 

 $ 55,804

 

 

 $ 54,347

 

 

 $ 55,381

 

 

 $ 55,151

 

5-quarter average ending capital

 

 $ 55,277

 

 

 $ 54,910

 

 

 $ 53,853

 

 

 $ 53,669

 

 

 $ 53,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending adjusted capital (see above)

 

 $ 29,571

 

 

 $ 29,673

 

 

 $ 28,215

 

 

 $ 29,247

 

 

 $ 29,014

 

5-quarter average ending adjusted capital

 

 $ 29,144

 

 

 $ 28,774

 

 

 $ 27,713

 

 

 $ 27,523

 

 

 $ 27,715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After-tax ROC (4 quarter reported NOPAT / 5-quarter average ending capital)

 

 

 12.0 %

 

 

 11.8 %

 

 

 11.6 %

 

 

 11.0 %

 

 

 8.7 %

Adjusted after-tax ROC (4 quarter trailing adjusted NOPAT / 5-quarter average ending adjusted capital)

 

 

 25.6 %

 

 

 25.4 %

 

 

 25.6 %

 

 

 24.9 %

 

 

 24.0 %

 

 
Page 10 of 10 cont’d