Linde achieves record levels and is set for further growth
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Linde AG /
Linde achieves record levels and is set for further growth
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* 2010 financial year:
Group sales up 14.8 percent to EUR 12.868 bn
Group operating profit* increases at a faster rate than sales, by 22.6
percent to EUR 2.925 bn
22.2 percent rise in proposed dividend to EUR 2.20 per share
* Group outlook for 2011: Increase in sales and operating profit expected
* Medium-term targets for 2014: Group operating profit of at least EUR 4 bn
and ROCE of at least 14 percent
* Supervisory Board appoints new member of the Executive Board: Sanjiv Lamba
assumes responsibility for the growth market of Asia
Munich, 10 March 2011 - At its meeting yesterday, the Supervisory Board of Linde
AG approved the financial statements of the holding company and the Group
financial statements for the 2010 financial year. At this meeting, it also
appointed Sanjiv Lamba (46) as a new member of the Linde AG Executive Board with
immediate effect. Mr Lamba, who is based in Singapore, will be responsible in
future for the gases business of the Group in Greater China, South and East Asia
and in the South Pacific region. He will also assume responsibility for the
Asian joint ventures and for the electronic gases product segment. Mr Lamba's
latest role in the Group was managing Linde's business in the South and East
Asia region, which forms part of the Asia & Eastern Europe operating segment.
"We are delighted that the Supervisory Board has appointed Sanjiv Lamba to the
Executive Board. This appointment demonstrates our awareness of the growing
importance of the emerging economies of Asia to our Group," said Professor Dr
Wolfgang Reitzle, Chief Executive Officer of Linde AG. "In the 2010 financial
year, the Group was already reaping the benefit of its very good position in
these markets." Linde achieved double-digit growth in both sales and operating
profit, surpassing its previous best figures posted in the 2008 financial year.
"The global economy has grown faster and more vigorously than might have been
expected," the CEO continued. "But our good performance is not just due to the
recovery of the global economy. It is also the result of us being in a position
to seize growth opportunities as they arise. Our gases and engineering
businesses have a global presence. What's more, we have continued to achieve
efficiency gains."
Linde is looking to the future with confidence. "We have set ourselves new
medium-term targets," explained CEO Reitzle. "We will be aiming to achieve Group
operating profit* of at least EUR 4 bn in the 2014 financial year. Our minimum
target for return on capital employed for the same year is 14 percent." This
four-year forecast is based on current economic estimates and prevailing
exchange rates. "In the 2011 and 2012 financial years, we assume Group sales and
Group operating profit* will show continuous improvement."
In the 2010 financial year, Group sales rose 14.8 percent to EUR 12.868 bn
(2009: EUR 11.211 bn). By way of comparison, Linde achieved sales in the 2008
financial year of EUR 12.663 bn. The Group continued to increase its
profitability, with Group operating profit* growing at a faster rate than sales,
up 22.6 percent to EUR 2.925 bn (2009: EUR 2.385 bn). Group operating profit in
2008 was EUR 2.555 bn. The Group operating margin in the 2010 financial year
increased by 140 basis points to 22.7 percent (2009: 21.3 percent). Linde was
also able to benefit significantly from the positive impact of its High
Performance Organisation (HPO) programme which is designed to achieve
sustainable process optimisation and efficiency gains.
Linde saw a 66.9 percent increase in earnings before taxes on income (EBT) to
EUR 1.399 bn (2009: EUR 838 m). Earnings after tax rose by 62.9 percent to EUR
1.064 bn (2009: EUR 653 m). The amount attributable to Linde AG shareholders was
EUR 1.005 bn (2009: EUR 591 m), giving earnings per share of EUR 5.94 (2009: EUR
3.51). On an adjusted basis, i.e. after adjusting for the effects of the
purchase price allocation identified in the course of the BOC acquisition,
earnings per share stood at EUR 6.89 (2009: EUR 4.58).
Operating cash flow continued the positive trends seen in the previous quarters.
It increased significantly from the prior year, by 13.1 percent to EUR 2.422 bn
(2009: EUR 2.142 bn). ROCE (return on capital employed) rose to 12.5 percent
(2009: 10.4 percent). Linde reduced its net financial debt by EUR 622 m to EUR
5.497 bn (2009: EUR 6.119 bn).
The Executive Board and Supervisory Board of Linde AG will propose a resolution
at the Annual General Meeting to be held on 12 May 2011 that a dividend of EUR
2.20 per share be paid. This is an increase of 22.2 percent compared with the
dividend declared in 2010 of EUR 1.80.
Gases Division
The improvement in the general economic climate in the course of the 2010
financial year resulted in a rise in demand in the global gases business.
Against this background, Linde achieved a 14.5 percent increase in sales in the
Gases Division to EUR 10.228 bn when compared with the figure for 2009 of EUR
8.932 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
5.7 percent. Linde achieved a significant improvement in profitability in the
Gases Division, where operating profit rose by 16.3 percent to EUR 2.766 bn
(2009: EUR 2.378 bn). The operating margin increased by 40 basis points to 27.0
percent (2009: 26.6 percent). This improvement in profitability was due mainly
to the positive impact of the efficiency improvement and process optimisation
measures included in HPO.
Business trends in the various operating segments of the Gases Division reflect
great regional variations in the pace of the economic recovery. The fastest
growth was to be seen in the emerging economies of Asia, especially in China and
India, and in South America. In contrast, in the more mature economies, such as
the US and Western Europe, economic output grew at a relatively modest rate. Yet
even in those regions, demand rose in the course of 2010.
In the Western Europe operating segment, Linde achieved a 6.8 percent increase
in sales to EUR 4.021 bn (2009: EUR 3.765 bn). On a comparable basis, sales rose
by 3.3 percent. Operating profit grew at a faster rate than sales, by 12.7
percent to EUR 1.184 bn (2009: EUR 1.051 bn). The operating margin rose to 29.4
percent, 150 basis points above the prior-year figure of 27.9 percent.
In the Americas operating segment, sales in the 2010 financial year rose 15.0
percent to EUR 2.279 bn (2009: EUR 1.981 bn). On a comparable basis, the
increase in sales was 8.6 percent. In this region too, operating profit grew at
a faster rate than sales, rising by 16.3 percent to EUR 499 m (2009: EUR 429 m).
The operating margin was 21.9 percent (2009: 21.7 percent).
Against a background of dynamic economic trends in Asia and the economic
turnaround in Eastern Europe, Linde achieved significant growth in both sales
and operating profit in the Asia & Eastern Europe operating segment. The Group
benefited from its leading position in these markets. In the 2010 financial
year, sales grew 21.9 percent to EUR 2.239 bn (2009: EUR 1.836 bn). Operating
profit was up 19.7 percent to EUR 667 m (2009: EUR 557 m). At 29.8 percent, the
operating margin in this operating segment remained very high (2009: 30.3
percent). After adjusting for the dilutive effect of the pass-through of higher
natural gas prices, the operating margin was at the same level as in 2009.
In the South Pacific & Africa operating segment, Linde achieved sales growth of
25.8 percent to EUR 1.784 bn (2009: EUR 1.418 bn). This significant increase was
due almost entirely to positive exchange rate effects for the Australian dollar
and the South African rand. On a comparable basis, the increase in sales was
2.5 percent. Operating profit was also boosted by positive exchange rate
effects, increasing by 22.0 percent to EUR 416 m (2009: EUR 341 m). The
operating margin in this segment was 23.3 percent (2009: 24.0 percent).
The performance of the various product segments reflects the positive trends in
the Gases Division in the 2010 financial year. In the on-site business, where
gases are supplied on site to major customers, Linde achieved the highest rate
of growth. On a comparable basis, sales in this product segment increased by
9.6 percent to EUR 2.451 bn (2009: EUR 2.237 bn). The Group benefited from the
continued improvement in capacity utilisation in existing plants and from new
plants coming on stream. In the liquefied gases business, sales on a comparable
basis were EUR 2.487 bn. This was a 6.6 percent increase compared with the
prior-year figure of EUR 2.333 bn. In the cylinder gas business, Linde achieved
a 3.4 percent increase in sales on a comparable basis to EUR 4.160 bn (2009: EUR
4.023 bn). After a slow start, the business picked up steadily in the course of
2010. The Healthcare product segment, which supplies medical gases and provides
related after-sales and advisory services, continued to deliver a solid
performance, with sales rising 4.2 percent on a comparable basis to EUR 1.130 bn
(2009: EUR 1.084 bn).
Gases Division - Outlook
The original target for the gases business has not changed. The Group wants to
grow at a faster rate than the market and continue to increase its productivity.
In the on-site business, Linde has a healthy project pipeline, which will make a
significant contribution to sales and operating profit in the 2011 financial
year. The liquefied gases and cylinder gas business should benefit from the
continuing general economic recovery. In the Healthcare product segment, Linde
expects the positive business trends to continue, with sales growing at a faster
rate than in 2010. Against this background, Linde assumes that sales generated
by the Gases Division in the 2011 financial year will be higher than in 2010 and
that operating profit will increase at a faster rate than sales.
Linde has reorganised the regional responsibilities within the Gases Division
and will therefore be adjusting its reporting accordingly. From the first
quarter of 2011, Linde will report according to the following operating
segments: Americas, EMEA (Western and Eastern Europe, Middle East and Africa)
and Asia/Pacific.
Engineering Division
In the international large-scale engineering business, a late-cycle sector, the
market climate stabilised in the course of 2010. 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 2010 financial year of EUR 2.461
bn, a 6.5 percent increase on the prior-year figure of EUR 2.311 bn. The
successful execution of a number of individual projects meant that operating
profit grew at a faster rate than sales, by 29.0 percent to EUR 271 m (2009: EUR
210 m). The operating margin rose to 11.0 percent (2009: 9.1 percent), again
significantly exceeding the target figure of 8 percent.
Order intake was EUR 2.159 bn at the end of the year (2009: EUR 2.458 bn). When
comparing the figures, it should be noted that order intake in 2009 was largely
shaped by a small number of major projects. One major contract for the
construction of an olefin plant in Abu Dhabi (United Arab Emirates) was alone
worth USD 1.075 bn. In 2010, on the other hand, new orders were spread more
widely, with numerous contracts for small and medium-sized plants, both from
third parties and from the Group's own Gases Division. Linde has retained its
high order backlog. At 31 December 2010, this stood at EUR 3.965 bn (2009: EUR
4.215 bn).
Engineering Division - Outlook
The high order backlog forms a good basis for a solid business performance in
the Engineering Division in the next two years. Linde expects sales in its plant
construction business in the 2011 financial year to reach the same level as in
2010. The minimum target for the operating margin in the current financial year
is 8 percent.
Linde remains well positioned in the global market for olefin plants, natural
gas plants, air separation plants and hydrogen and synthesis gas plants. In
particular, it stands to gain in the long term from investment in two structural
growth areas, energy and the environment.
Note: The 2010 Annual Report of The Linde Group is available on the Internet at
www.linde.com.
To coincide with the publication of the annual 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. Following the teleconference, you will be
able to hear a recording of the event by calling +49.800.101.2111. Please give
the following reference number: 890118.
The Linde Group is a world-leading gases and engineering company with around
48,500 employees working in more than 100 countries worldwide. In the 2010
financial year, it achieved sales of EUR 12.868 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. Linde 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:
Press Investor Relations
Uwe Wolfinger Dr Dominik Heger
Telephone: +49.89.35757-1320 Telephone: +49.89.35757-1334
Thomas Eisenlohr
Telephone: +49.89.35757-1330
*Operating profit: EBITDA before non-recurring items, including share of net
income from associates and joint ventures.
--- End of Message ---
Linde AG
Klosterhofstrasse 1 Munich Germany
WKN: 648300;ISIN: DE0006483001;Index:Prime All Share,HDAX,DAX,CDAX;
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[HUG#1495826]
Unternehmensinformation / Kurzprofil:
Datum: 10.03.2011 - 07:31 Uhr
Sprache: Deutsch
News-ID 52306
Anzahl Zeichen: 17120
contact information:
Town:
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Kategorie:
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