Linde Reports Second-Quarter 2024 Results

Second-Quarter Highlights

• Sales $8.3 billion, up 1%, underlying sales up 3%
• Operating profit $2.2 billion, adjusted operating profit $2.4 billion, up 6%
• Operating profit margin 26.4%; adjusted operating profit margin 29.3%, up 140 basis points
• EPS $3.44, up 8%; adjusted EPS $3.85, up 8% YoY
• Full-year 2024 adjusted EPS guidance of $15.40 - $15.60 representing 9% to 11% growth year-over-year excluding FX

Woking, UK, August 2, 2024 – Linde plc (Nasdaq: LIN) today reported second-quarter 2024 net income of $1,663 million and diluted earnings per share of $3.44, up 6% and 8% respectively.  Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,859 million, up 6% versus prior year.  Adjusted earnings per share was $3.85, 8% above prior year.

Linde’s sales for the second quarter were $8,267 million, up 1% versus prior year.  Compared to prior year, underlying sales increased 3% from price attainment as volume growth was flat.

Second-quarter operating profit was $2,184 million.  Adjusted operating profit of $2,422 million was up 6% versus prior year led by higher price and continued productivity initiatives across all segments.  Adjusted operating profit margin of 29.3% was 140 basis points above prior year.

Second-quarter operating cash flow of $1,929 million decreased 10% versus prior year driven primarily by engineering project prepayment timing.  After capital expenditures of $1,133 million, free cash flow was $796 million.  During the quarter, the company returned $2,100 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, “Despite the challenging macro, the Linde team again delivered high-quality results, growing EPS 8%, increasing ROC to 25.7% and expanding operating margins 140 basis points, reaching 29.3%. This exemplifies our ability to continuously grow the integrated industrial gas model while developing and winning high-quality growth opportunities.”

Lamba continued, “Looking ahead, the economic environment remains uncertain.  However, we are well positioned to win more than our fair share of high-quality projects and continue to create shareholder value.” 

For the third quarter of 2024, Linde expects adjusted diluted earnings per share in the range of $3.82 to $3.92, up 5% to 8% versus prior-year quarter or 6% to 9% 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 $15.40 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 $4.7 billion contractual sale of gas project backlog.

Second-Quarter 2024 Results by Segment

Americas sales of $3,655 million increased 3% versus prior-year quarter.  Compared with second quarter 2023, underlying sales increased 4% driven by higher pricing as volumes were flat.  Operating profit of $1,159 million was 31.7% of sales, 150 basis points above prior year.

APAC (Asia Pacific) sales of $1,657 million were down 2% versus prior year driven by negative currency translation. Compared with second quarter 2023, underlying sales were stable as price and volume were flat versus prior year quarter.  Operating profit of $474 million was 28.6% of sales, 60 basis points above prior year.

EMEA (Europe, Middle East & Africa) sales of $2,091 million were down 3% versus prior year.  Compared with second quarter 2023, underlying sales grew 2% driven by 3% higher pricing partially offset by 1% lower volumes, primarily in the metals and mining end market.  Operating profit of $704 million was 33.7% of sales, 450 basis points above prior year. 

Linde Engineering sales were $544 million, increased 10% versus prior year, and operating profit was $96 million or 17.6% of sales.  Order intake for the quarter was $336 million and third-party sale of equipment backlog was $3.2 billion.

Earnings Call

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

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. 

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.