Linde achieves its best ever results and confirms its medium-term targets
(Thomson Reuters ONE) -
Linde AG /
Linde achieves its best ever results and confirms its medium-term targets
. Processed and transmitted by Thomson Reuters ONE.
The issuer is solely responsible for the content of this announcement.
* 2011 financial year:
Group sales up 7.1 percent to EUR 13.787 bn
Gases Division sales up 8.1 percent
Group operating profit* grows at a faster rate than sales, by 9.7 percent to
EUR 3.210 bn
13.6 percent rise in proposed dividend to EUR 2.50 per share
* Group outlook for 2012: Increase in sales and operating profit expected
* Medium-term targets for 2014 confirmed: Group operating profit* of at least
EUR 4 bn and ROCE of at least 14 percent
Munich, 9 March 2012 - The technology company The Linde Group once again saw
profitable growth in the 2011 financial year, achieving its best ever figures
for Group sales and Group operating profit*. "We have become even more efficient
overall and were able to achieve the targets we had set in full," said Professor
Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. "This is testament to
our Group's excellent position. Our gases and engineering business has a global
presence across all industry sectors and is outstandingly well-placed in the
growth markets."
Linde is also confident about the future. "We are well-prepared for a
challenging environment, and in the 2012 financial year we expect to continue to
achieve growth in Group sales and an improvement in Group operating profit when
compared with 2011," commented CEO Reitzle. "We also confirm our medium-term
targets. In the 2014 financial year, we will be aiming to generate Group
operating profit* of at least EUR 4 bn. In that same year, we want our core
performance indicator, ROCE (return on capital employed), to be at least 14
percent." The Group believes that global megatrends, energy and the environment,
health and healthcare, and the emerging economies will provide good
opportunities so that it will be able to continue to achieve sustainable,
profitable growth. "We intend to seize those opportunities with both hands,"
explained Reitzle.
In the 2011 financial year, Group sales rose 7.1 percent to EUR 13.787 bn (2010:
EUR 12.868 bn). After adjusting for exchange rate effects, the increase was 7.6
percent. Linde has made good progress with the implementation of HPO (High
Performance Organisation), its holistic concept designed to achieve sustainable
process optimisation and productivity gains, and Group operating profit* grew at
a faster rate than sales, by 9.7 percent to EUR 3.210 bn (2010: EUR 2.925 bn).
The Group operating margin in the 2011 financial year increased by 60 basis
points to 23.3 percent (2010: 22.7 percent).
Linde was again able to achieve significant increases in other Group performance
indicators. Earnings before taxes on income (EBT) rose 15.7 percent to EUR
1.619 bn (2010: EUR 1.399 bn). Earnings after tax of EUR 1.244 bn were 16.9
percent above the figure for 2010 of EUR 1.064 bn. The amount attributable to
Linde AG shareholders was EUR 1.174 bn (2010: EUR 1.005 bn), giving earnings per
share of EUR 6.88 (2010: EUR 5.94). On an adjusted basis, i.e. after adjusting
for the effects of the purchase price allocation on the acquisition of BOC,
earnings per share stood at EUR 7.71 (2010: EUR 6.89). ROCE (return on capital
employed) rose to 13.0 percent (2010: 12.5 percent). At the same time, the Group
succeeded in reducing its net financial debt by EUR 403 m to EUR 5.094 bn (2010:
EUR 5.497 bn).
The Executive Board and Supervisory Board of Linde AG will propose a resolution
at the Annual General Meeting to be held on 4 May 2012 that a dividend of EUR
2.50 per share be paid. This is an increase of 13.6 percent compared with the
prior-year dividend of EUR 2.20.
Gases Division
The improvement in the general economic climate in the course of the 2011
financial year resulted in a rise in demand in the global gases business.
Against this background, Linde achieved an 8.1 percent increase in sales in the
Gases Division to EUR 11.061 bn when compared with the figure for 2010 of EUR
10.228 bn. On a comparable basis, i.e. after adjusting for exchange rate
effects, changes in the price of natural gas and changes to Group structure,
sales grew 7.4 percent. Linde achieved a significant improvement in
profitability in the Gases Division, where operating profit rose by 9.9 percent
in 2011 to EUR 3.041 bn (2010: EUR 2.766 bn). The operating margin increased by
50 basis points to 27.5 percent (2010: 27.0 percent).
This improvement in profitability was partly as a result of the positive impact
of the efficiency improvement and process optimisation measures included in HPO.
Within the individual segments of the Gases Division, the greatest momentum was
to be seen in the emerging economies of Asia, especially in China and India, as
well as in South America. However, in the more mature economies, such as the
United States and Western Europe, economic output grew at a comparatively modest
rate.
In the EMEA segment (Europe, the Middle East and Africa), Linde achieved sales
growth of 6.4 percent to EUR 5.672 bn (2010: EUR 5.330 bn). On a comparable
basis, the growth in sales was 5.7 percent. Operating profit increased at a
faster rate than sales, by 8.0 percent to EUR 1.634 bn (2010: EUR 1.513 bn). The
operating margin rose to 28.8 percent, 40 basis points above the prior-year
figure of 28.4 percent. This positive trend was also the result of the rigorous
implementation of various HPO initiatives to increase productivity and
standardise processes.
In the Asia/Pacific segment, Linde achieved significant growth in sales and
operating profit. The Group also benefited from its leading positions in these
markets. In the 2011 financial year, sales in the Asia/Pacific segment rose
14.3 percent to EUR 3.076 bn (2010: EUR 2.692 bn). On a comparable basis, the
increase in sales was 9.2 percent. Strict implementation of Linde's HPO
programme pushed operating profit up 15.6 percent to EUR 872 m (2010: EUR 754
m). This gave an operating margin of 28.3 percent (2010: 28.0 percent). When
comparing Linde's good performance here with that of the prior year, two factors
need to be taken into account. One is the pass-through of increases in the price
of natural gas and the other the preliminary investment required to establish
infrastructure and employ new staff in the rapidly expanding Chinese market.
In the Americas segment, sales in the 2011 financial year rose 4.6 percent to
EUR 2.384 bn (2010: EUR 2.279 bn). On a comparable basis, sales were up 9.1
percent. In this region as well, operating profit increased at a faster rate
than sales, by 7.2 percent to EUR 535 m (2010: EUR 499 m). As a result, the
operating margin was 22.4 percent (2010: 21.9 percent). This improvement in the
margin is a consequence of positive earnings trends in North America. Here too
there is evidence of the successful implementation of the measures designed to
achieve sustainable process optimisation and productivity gains.
The performance of the individual product areas reflects the overall positive
trend in the Gases Division in the 2011 financial year. In the on-site business,
where gases are supplied on site to major customers, Linde again achieved strong
growth. On a comparable basis, sales in this product area rose 8.5 percent to
EUR 2.695 bn (2010: EUR 2.484 bn). This increase was mainly due to the start-up
of new plants. Moreover, Linde succeeded in winning a number of new on-site
contracts, primarily in the emerging economies of Asia and especially in China.
General economic growth also enabled Linde to achieve significant growth in its
liquefied gases and cylinder gas business. In the cylinder gas business, the
Group achieved a 6.8 percent increase in sales on a comparable basis to EUR
4.494 bn (2010: EUR 4.208 bn). In the liquefied gases business, Linde achieved
sales of EUR 2.683 bn. On a comparable basis, this was 8.5 percent higher than
the prior-year figure of EUR 2.472 bn. In the Healthcare product area, which
supplies medical gases and provides related maintenance and advisory services,
Linde continued to see steady growth, achieving an increase in sales on a
comparable basis of 5.0 percent to EUR 1.189 bn (2010: EUR 1.132 bn).
Gases Division - Outlook
Linde remains committed to its original target for the gases business of growing
at a faster pace than the market and continuing to increase productivity. In its
on-site business, Linde has a healthy project pipeline, which will continue to
make a substantial contribution to sales and earnings trends in the 2012
financial year. Linde expects its liquefied gases and cylinder gas business to
perform in line with macroeconomic trends.
In the Healthcare product area, Linde is anticipating continuing steady growth.
Additional momentum will be generated here by the acquisition of Air Products'
Continental European homecare business, subject to the approval of the relevant
antitrust authority and the usual closing conditions.
Against this background, Linde continues to expect that sales generated by the
Gases Division in the 2012 financial year will exceed sales achieved in 2011 and
that there will be an improvement in operating profit in 2012.
Engineering Division
In the international large-scale engineering business, a late-cycle sector, the
market climate continued to improve in the course of 2011. Linde saw a revival
in investment activity, especially for small and medium-sized projects, in its
four main lines of business (olefin plants, natural gas plants, air separation
plants, hydrogen and synthesis gas plants).
The Engineering Division achieved sales in the 2011 financial year of EUR 2.531
bn, a 2.8 percent increase on the prior-year figure of EUR 2.461 bn. The
successful execution of a number of individual projects meant that operating
profit grew at a faster rate than sales, by 12.2 percent to EUR 304 m (2010: EUR
271 m). The operating margin rose to 12.0 percent (2010: 11.0 percent), again
significantly exceeding the target figure of 8 percent.
Order intake was EUR 2.235 bn at the end of the year, 3.5 percent above the
figure for 2010 of EUR 2.159 bn. Contributing to this positive trend was the
higher number of orders from the Group's Gases Division, a fact which confirms
Linde's integrated business model.
The Group has retained its high order backlog. At 31 December 2011, this stood
at EUR 3.600 bn (2010: EUR 3.965 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 sales in its plant construction business in the 2012 financial
year as in 2011. It anticipates that it will achieve an operating margin in
2012 of at least 10 percent. In the medium term, the target for the operating
margin remains at 8 percent.
Linde is well-positioned in the international market for olefin plants, natural
gas plants, air separation plants and hydrogen and synthesis gas plants, and
will derive lasting benefit in particular from investment in two structural
growth areas: energy and the environment.
Note: The 2011 Annual Report of The Linde Group is available on the Internet at
www.linde.com.
To coincide with the publication of the financial statements, a teleconference
for analysts will take place today at 2pm (German time) in English with
Professor Dr Wolfgang Reitzle, CEO of Linde AG, and Georg Denoke, CFO of Linde
AG. Journalists will have the opportunity to listen to the conference live by
dialling +49.69.589.99-0509. Please tell the operator your name and the name of
your company.
The Linde Group is a world-leading gases and engineering company with around
50,500 employees in more than 100 countries worldwide. In the 2011 financial
year, it achieved sales of EUR 13.787 bn. The strategy of The Linde 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
responsibly towards its shareholders, business partners, employees, society and
the 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 development.
For more information, see The Linde Group online at http://www.linde.com.
Further information:
Media Investor Relations
Uwe Wolfinger Dr Dominik Heger
Telephone: +49.89.35757-1320 Telephone: +49.89.35757-1334
Matthias Dachwald Lisa Tilmann
Telephone: +49.89.35757-1333 Telephone: +49.89.35757-1328
*Operating profit: EBITDA including share of net income from associates and
joint ventures.
Press Release as PDF:
http://hugin.info/125064/R/1592643/500917.pdf
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Thomson Reuters clients. The owner of this announcement warrants that:
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other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Linde AG via Thomson Reuters ONE
[HUG#1592643]
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