January to September 2012: Linde's business performance remains
steady and its outlook is confirmed
MUNICH, GERMANY -- (Marketwire) -- 10/29/12 -- Linde AG /January to
September 2012: Linde's business performance remains steady and its
outlook is confirmed.
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-- Group revenue up 8.4 percent to EUR 11.063 bn
-- Group operating profit increases by 8.5 percent to EUR 2.563 bn
-- Group operating margin rises slightly to 23.2 percent (2011: 23.1
-- Lincare transaction successfully concluded
-- Short-term outlook and medium-term outlook confirmed:
-- 2012: Increase in Group revenue and Group operating profit
-- 2013: Group operating profit of at least EUR 4 bn
-- 2015: ROCE of at least 14 percent
-- Concept designed to achieve sustainable efficiency gains (HPO) to be
-- 2013-2016: Additional reductions in gross costs totalling EUR 750 m
to EUR 900 m
The performance of the technology company The Linde Group has remained
steady in the nine months ended 30 September 2012, with Group
and Group operating profit both increasing once again. "We are still
on track, even though the economic situation has worsened in the past
said Professor Dr Wolfgang Reitzle, Chief Executive
Officer of Linde AG. "Lincare has already had a positive impact. The
acquisition of this business has made our position even more robust."
Against this background, CEO Reitzle confirmed the short-term outlook
and medium-term outlook for the Group: "We continue to expect that we
increases in Group revenue and Group operating profit in
the full year 2012 when
compared with the previous year. We want to
achieve Group operating profit in
the 2013 financial year of at least
EUR 4 bn." The Group is seeking to achieve
return on capital employed
(ROCE) of at least 14 percent in the 2015 financial
Linde will continue to apply its holistic concept for sustainable
gains (HPO) after 2012 and is planning to achieve further
reductions in gross
costs totalling EUR 750 m to EUR 900 m in the
years 2013 to 2016. "This will
help to reinforce our high level of
profitability even in a challenging environment," explained Reitzle.
In the first nine months of 2012, Group revenue rose by 8.4 percent
to EUR 11.063 bn, compared with EUR 10.209 bn for the first nine
months of 2011. After
adjusting for exchange rate effects, the
increase in revenue was 3.8 percent. US homecare company, Lincare,
contributed to this positive trend for the first time
in the third
quarter of 2012, generating post-acquisition revenue of EUR 231 m.
Linde concluded its acquisition of Lincare in August 2012.
Linde continued with the rigorous implementation of its HPO (High
Organisation) programme, a holistic concept for
sustainable process optimisation
and productivity gains, increasing
Group operating profit by 8.5 percent to EUR
2.563 bn (2011: EUR
2.363 bn). The Group was able to continue to reinforce its
of profitability and to increase the Group operating margin
to 23.2 percent (2011: 23.1 percent).
Profit for the period rose in the first nine months of 2012 by 6.1
EUR 958 m (2011: EUR 903 m). Profit attributable to Linde
AG shareholders was
EUR 904 m (2011: EUR 856 m). This gives earnings
per share of EUR 5.15 (2011:
EUR 5.02). When comparing with the
figure for the prior-year period, it is important to consider the EUR
1.4 bn capital increase undertaken in July 2012 to refinance the
Lincare acquisition. The number of Linde shares rose as a result
the capital increase.
On an adjusted basis, i.e. after adjusting for the effects of the
allocation from the BOC acquisition, earnings per share
stood at EUR 5.80 (2011:
Revenue in the Gases Division in the first nine months of 2012 grew
to EUR 9.153 bn, compared with a figure of EUR 8.270 bn
for the prior-year period. When considering this increase, the
acquisition of Lincare should be
taken into account. In the third
quarter, Lincare contributed revenue of EUR
231 m to the total
revenue of the Gases Division. On a comparable basis, i.e.
adjusting for exchange rate effects, changes in the price of natural
and Lincare's post-acquisition revenue, the increase in revenue
was 3.3 percent.
Linde's Gases Division achieved a 10.2 percent
increase in operating profit to
EUR 2.484 bn (2011: EUR 2.254 bn).
The division's operating margin was 27.1 percent, almost as high as
the figure of 27.3 percent achieved in the prior-year
As in prior quarters, business trends in the individual segments in
Division varied in each case, depending on prevailing
In the EMEA segment (Europe, Middle East and Africa), Linde achieved
growth of 5.0 percent in the first nine months of 2012 to EUR
4.472 bn (2011:
EUR 4.258 bn). On a comparable basis, the growth in
revenue was 3.6 percent.
Operating profit increased by 4.1 percent to
EUR 1.265 bn (2011: EUR 1.215 bn).
This resulted in an operating
margin of 28.3 percent (2011: 28.5 percent). The
homecare operations acquired by Linde from Air Products at the end of
April 2012 were one of the factors in the expansion of business
the EMEA region.
Business performance was adversely affected by unfavourable economic
in the eurozone. A planned stoppage for plant maintenance
in southern Europe
also acted as a brake on revenue trends. In
Eastern Europe and the Middle East,
on the other hand, Linde was able
to benefit from a good economic environment.
In the Asia/Pacific segment, Linde achieved revenue growth of 14.4
the first nine months of 2012 to EUR 2.611 bn (2011: EUR
2.283 bn). On a comparable basis, the increase in revenue was 4.5
percent. Growth in this region
was adversely affected by plant
stoppages. In the third quarter, there was a
slight weakening in
demand in all product areas.
Operating profit was up 9.9 percent to EUR 697 m (2011: EUR 634 m).
This resulted in an operating margin of 26.7 percent (2011: 27.8
percent). When comparing the operating margin for the first nine
months of 2012 with that for
the prior-year period, factors to be
taken into account are the pass-through of increases in the price of
natural gas and the up-front investment required to
grow the business
and employ new staff in the rapidly expanding Asian
especially in China.
In the Americas segment, Linde achieved revenue growth of 20.9
percent in the
first nine months of 2012 to EUR 2.150 bn (2011: EUR
1.778 bn). This dynamic
growth was mainly due to the positive
contribution made by Lincare. Lincare operates solely in North
America and contributed revenue of EUR 231 m in the
third quarter of
2012 to the total revenue of the Americas segment. On a comparable
basis, Linde would have achieved a 2.4 percent increase in revenue in
Operating profit rose at a faster rate than revenue, by 28.9 percent
to EUR 522
m (2011: EUR 405 m). At 24.3 percent, the operating
margin significantly exceeded the figure for the prior-year period of
22.8 percent. The main reason
for the increase was the Lincare
acquisition. When comparing the operating margins, another factor to
consider is the pass-through of reductions in the
price of natural
Within the various product areas in the Gases Division, Linde
achieved the highest rate of growth in its Healthcare business, as
expected. After adjusting
for exchange rate effects, revenue here
rose by 38.6 percent to EUR 1.265 bn
(2011: EUR 913 m). The main
reason for this dynamic trend is the Group's acquisition of Lincare.
The newly-acquired business contributed EUR 231 m to the revenue of
the Healthcare product area in the third quarter of 2012.
this contribution, Linde would have achieved revenue growth
in the Healthcare
business of 13.3 percent.
In the cylinder gas product area, revenue rose on a comparable basis
by 1.6 percent to EUR 3.190 bn (2011: EUR 3.140 bn). In the liquefied
area, revenue increased on a comparable basis in the
nine months to 30 September
2012 by 2.6 percent to EUR 2.540 bn
(2011: EUR 2.476 bn). In the on-site business (where Linde supplies
gases on site to major customers), revenue rose
on a comparable basis
by 2.3 percent to EUR 2.158 bn (2011: EUR 2.109 bn). Plant
acted as a brake on trends in this product area. It is also worth
noting that most of the growth in the on-site product area was
joint ventures and that the Group's share of revenue
from these joint ventures
is not disclosed in the revenue of the
Gases Division - Outlook
Linde remains committed to its original target for the gases business
at a faster pace than the market and continuing to increase
productivity. In the on-site business, Linde has a healthy project
pipeline, which will continue to
make a substantial contribution to
revenue and earnings trends over the coming
years. The Group expects
its liquefied gases and cylinder gas business to perform in line with
macroeconomic trends. In the Healthcare product area, Linde
expecting to achieve significant increases in revenue and earnings as
a result of the acquisitions it has concluded, especially Lincare.
Linde continues to expect that revenue generated by the Gases
Division in the
2012 financial year will exceed revenue generated in
2011 and that operating
profit will improve.
Linde continued to see relatively stable trends in the first nine
months of 2012 in its international engineering project business.
During that period, the
Group's Engineering Division generated
revenue of EUR 1.740 bn, almost as high
as the figure achieved in the
prior-year period of EUR 1.776 bn. At EUR 214 m,
operating profit was
the same in the first nine months of 2012 as in the first
of 2011. The operating margin of 12.3 percent exceeded the high
figure achieved in the prior-year period of 12.0 percent.
The trends for order intake were very positive. Order intake in the
to 30 September 2012 was EUR 2.095 bn, 25.0 percent above
the figure for the
prior-year period of EUR 1.676 bn. This dynamic
performance was due in particular to a major contract in Saudi Arabia
acquired by Linde's Engineering
Division in the first quarter from
the Group's Gases Division. The total investment in this project is
USD 380 m. That part of the order which relates to Linde's
Engineering Division is for the turnkey construction of a HyCo plant
and an ammonia plant. The new plants will enable Linde to provide
of industrial gases to Sadara Petrochemical Company
(Sadara) in Jubail.
The Engineering Division has also been contracted by the Gases
Division to build
the largest air separation plant in Vietnam to
provide long-term supplies of
industrial gases to the Vietnamese
steel company POSCO SS-Vina (PSSV). The new
plant will also supply
products for the regional market in southern Vietnam.
awarded in August 2012, involves investment of around EUR 40 m.
Given the positive trend in orders, the order backlog in the
Engineering Division grew in the first nine months of 2012 to EUR
3.897 bn (31 December 2011: EUR 3.600 bn).
Engineering Division - Outlook
The high order backlog creates a good basis for a solid business
performance in the Engineering Division over the next two years.
Linde expects to generate the
same level of revenue in its plant
construction business in the 2012 financial
year as in 2011. Linde is
still anticipating that it will achieve an operating
margin in the
current financial year 2012 of at least 10 percent.
Linde is well-positioned in the international market for olefin
gas plants, air separation plants and hydrogen and
synthesis gas plants, and
will derive lasting benefit in particular
from two structural growth areas: energy and the environment.
To coincide with the publication of the quarterly financial
statements, a webcast for analysts will take place today at 2pm
German time in English with
Georg Denoke, member of the Executive
Board and CFO of Linde AG. Journalists
will have the opportunity to
watch the webcast by following this link:
The Linde Group is a world-leading gases and engineering company with
62,000 employees in more than 100 countries worldwide. In the
year, Linde generated revenue of EUR 13.787 bn. The
strategy of the Group is
geared towards long-term profitable growth
and focuses on the expansion of its
international business with
forward-looking products and services. Linde acts
its shareholders, business partners, employees, society and
environment - in every one of its business areas, regions and
locations across the globe. The Group is committed to technologies and
products that unite
the goals of customer value and sustainable
 Operating profit: EBITDA including share of profit or loss from
and joint ventures.
 ROCE (return on capital employed) based on the definition given
on page 046
of the 2011 Financial Report.
Press Release as PDF:
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For more information, see The Linde Group online at http://www.linde.com.
Dr Dominik Heger
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