January - September 2009: The Linde Group continues the positive
trend of the second quarter and ach
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ * Third quarter: significant improvement in Group operating profit* compared with the previous quarter * At 30 September: operating margin increases to 20.9 percent (2008: 20.3 percent) despite restructuring costs * 9.5 percent increase in operating cash flow to 1.424 billion euro * Group sales down 11.5 percent to 8.313 billion euro * Group operating profit* down 8.8 percent to 1.741 billion euro; down 4.7 percent after adjusting for restructuring costs * Outlook for 2009 unchanged: better business trends expected than in the first half of the year; however, 2008 record level no longer attainableMunich, 2 November 2009 - The technology group The Linde Groupcontinued the positive trend of the second quarter in a marketenvironment which remained difficult, achieving further increases inprofitability in the months July to September in comparison with theprevious quarter. In the third quarter, Group operating profit roseby 12.5 percent compared to the second quarter, while the operatingmargin increased significantly to 22.5 percent (2nd quarter: 20.4percent). The operating margin also continued to improve if acomparison is made between the first nine months of 2009 and the sameperiod in 2008. The Group operating margin for the period to 30September 2009 was 20.9 percent (2008: 20.3 percent). Adjusted forone-off restructuring costs of 80 million euro, the operating marginwas 21.9 percent."The positive trends we were seeing at the end of the second quarterhave continued to strengthen," said Professor Dr Wolfgang Reitzle,Chief Executive Officer of Linde AG. "The measures we have taken toachieve sustainable increases in productivity are having an evergreater impact. What's more, demand in our gases business isbeginning to pick up again slowly. However, one thing's clear: in the2009 financial year, we will not be able to match the level of salesand earnings achieved in the record year 2008. Nevertheless, based onour current figures, we expect our business performance in the secondhalf of 2009 to be better than in the first half of the year."Against the background of the global economic crisis, Group salesfell by 11.5 percent in the first nine months of 2009 to 8.313billion euro, compared with the record figure achieved in the firstthree quarters of 2008 of 9.392 billion euro. Group operating profit*for the nine months to 30 September 2009 was 1.741 billion euro, 8.8percent below the prior-year figure of 1.910 billion euro. Afteradjusting for restructuring costs arising from the High PerformanceOrganisation (HPO) programme, the fall in Group operating profit forLinde was only 4.7 percent. On the basis of HPO, the integratedprogramme for process optimisation and increased productivity, theaim of the Group is to achieve gross cost savings of between 650million euro and 800 million euro in the financial years from 2009 to2012 and to continue to improve its competitiveness irrespective ofthe economic situation.Earnings before taxes on income (EBT) were 611 million euro, adecrease of 185 million euro or 23.2 percent when compared with theprior-year figure of 796 million euro. After adjusting forrestructuring costs of 80 million euro and the gains on disposal ofbusinesses of 59 million euro achieved in the first nine months of2008, the decline was only 46 million euro or 6.2 percent.Group earnings after tax at 30 September 2009 were 456 million euro(2008: 593 million euro). After taking minority interests intoaccount, earnings attributable to Linde AG shareholders were 417million euro (2008: 552 million euro), giving earnings per share of2.47 euro (2008: 3.29 euro). After adjusting for the effect of thepurchase price allocation in the course of the BOC acquisition andthe profits on disposal earnings per share in the first nine monthsof 2009 stood at 3.38 euro (2008: 4.14 euro). The restructuring costsrecognised in the first nine months of 2009 have not been adjustedfor in this calculation. Cash flow from operating activitiesincreased by 9.5 percent to 1.424 billion euro (2008: 1.301 billioneuro). This significant rise was due to the optimisation of the coststructure as well as to improvements in working capital management.Gases DivisionIn the Gases Division, the recovery trend indicated in the secondquarter of 2009 continued into the third quarter. Sales and operatingprofit again rose when compared to the period April to June.Operating profit for the third quarter was 625 million euro, exactlythe same as the figure for the prior-year period. However, when thefigures for the whole reporting period January to September arecompared, there was a downward trend. Sales in the Gases Division forthe nine months to 30 September 2009 were 6.629 billion euro, 7.4percent lower than the figure for the prior-year period of 7.157billion euro. On a comparable basis, i.e. after adjusting forexchange rate effects and also taking into account changes in theprice of natural gas and changes to Group structure, the fall insales was 6.4 percent.The operating profit of the Gases Division for the first nine monthsof 2009 was 1.763 billion euro, only 3.1 percent under the comparableprior-year figure of 1.819 billion euro. This demonstrates that theGases Division has been able to limit the decline in earnings in adifficult market environment and achieve an improvement in theoperating margin from 25.4 percent in 2008 to the current figure ofthereby 26.6 percent.The trends in the individual regions and product areas of the GasesDivision were as follows: In the Western Europe operating segment,sales trends in the third quarter continued to be adversely affected,as in the first half of 2009, by the substantial weakening of theBritish pound. As a result of this currency fluctuation, sales forthe nine months to 30 September 2009 fell by 10.5 percent to 2.801billion euro (2008: 3.131 billion euro). On a comparable basis, thedecline in sales would have been a mere 5.4 percent. Operating profitwas also adversely affected by exchange rate movements, falling by8.4 percent to 782 million euro (2008: 854 million euro). Theoperating margin in Western Europe was 27.9 percent, exceeding thehigh figure of 27.3 percent achieved in the prior-year period. Thisimprovement demonstrates the positive impact of the HPO programme.The market environment in Western Europe saw a further period ofstabilisation, although there were no signs as yet of a widespreadmarket recovery.In the Americas operating segment, Linde achieved sales in the ninemonths to 30 September 2009 of 1.485 billion euro, 10.1 percent belowthe figure for the first nine months of 2008 of 1.652 billion euro.On a comparable basis, sales were 8.3 percent lower than in theprior-year period. Operating profit fell from 320 million euro to 316million euro, a much smaller drop of only 1.3 percent. The operatingmargin improved significantly as a result, by 190 basis points to21.3 percent (2008: 19.4 percent). This increase was mainly due tothe impact of natural gas prices. Steps taken to optimise the Group'scost structure did here as well contribute to this positivedevelopment.In the Asia & Eastern Europe operating segment, sales in the ninemonths to 30 September 2009 were 1.343 billion euro, 8.0 percentbelow the figure for the prior-year period of 1.459 billion euro. Ona comparable basis, the fall in sales was 6.4 percent. Operatingprofit, on the other hand, of 415 million euro was almost as high asthe figure for the nine months to 30 September 2008 of 417 millioneuro. As a result, the operating margin rose significantly in thereporting period from 28.6 percent to 30.9 percent. The acceleratedimplementation of our HPO programme again contributed to thispositive trend. Additional contributions to earnings also arose fromLinde's joint venture activities in China.Just as in the second quarter, very clear signs of an economicrecovery continued to be evident as the year progressed in the Asia &Eastern Europe operating segment. This trend could be seen, forexample, in the improved capacity utilisation of our tonnage plants.In the South Pacific & Africa operating segment, Linde also achievedan increase in sales in the first nine months of the year: of 8.6percent to 1.052 billion euro (2008: 969 million euro). Theconsolidation for the first time of the Australian LPG business Elgasmore than offset adverse movements in the exchange rate of theAustralian dollar. On a comparable basis, sales in the first ninemonths declined by 6.1 percent. Operating profit increased by 9.6percent to 250 million euro (2008: 228 million euro), a faster rateof increase than that of sales. The operating margin rose accordinglyfrom 23.5 percent to 23.8 percent.In the individual product areas of the Gases Division, businesstrends were also affected by global economic conditions, whichremained challenging. In comparison with the first half of the year,however, the trend here was positive in the third quarter. On acomparable basis, Linde's sales in the liquefied gases business fellby 8.7 percent to 1.636 billion euro (2008: 1.791 billion euro). Inthe cylinder gas business, there was a decline in sales of 9.1percent to 2.713 billion euro (2008: 2.984 billion euro). Sales of1.513 billion euro in the on-site (tonnage) business, where we supplyindustrial gases from plants situated on the user's site, were 4.2percent below the figure for the prior-year period of 1.579 billioneuro. Meanwhile, the Healthcare product area once again proved veryrobust. Here, sales rose by 5.6 percent to 767 million euro (2008:726 million euro).Gases Division - OutlookThe continuing uncertainty in the market environment has not causedus to change in any way our original target for the gases business.Linde wants to grow at a more rapid pace than the market and tocontinue to increase its productivity. Given the current tendencytowards economic recovery and based on positive trends in the thirdquarter, The Linde Group expects business performance in the GasesDivision to be better in the second half of 2009 than in the firstsix months of the year. This will, however, not suffice to ensurethat sales and earnings for the full year 2009 will reach the levelsachieved in 2008.Engineering DivisionIn the Engineering Division, Linde achieved sales of 1.677 billioneuro in the first nine months of 2009, although it was unable toachieve the very high level of sales achieved in the prior-yearperiod of 2.063 billion euro. This decline is mainly due to thevariation in project structure and the state of completion ofprojects in the two different periods. Operating profit of 145million euro was also below the comparable figure for the nine monthsto 30 September 2008 of 183 million euro. The operating margin was8.6 percent. This significantly exceeded Linde's target margin of 8percent, which is well above the industry average. Due to a markedreluctance by customers to award new projects, order intake in thefirst nine months of 2009 of 1.514 billion euro was, as expected,lower than the figure for the prior-year period of 2.295 billioneuro.The order backlog at 30 September 2009 was 3.911 billion euro, whichis still a very high level (31 December 2008: 4.436 billion euro).Most of the current order backlog relates to the air separation plantand olefin plant product areas. As in the first six months of theyear, the geographical focus remains the Middle East. Major projectsin this region include, for example, the new ethylene plant in Ruwaiscommissioned by the Borouge consortium, the Enhanced Gas Recoveryplant which is operated together with Linde's joint venture partnerADNOC, and the Gas-to-Liquid (GTL) plant which Linde is supplying forShell in Qatar.Engineering Division - OutlookThe continuing high level of our order backlog forms a basis forrelatively stable business performance in the Engineering Divisionover the next one to two years. However, the impact of the economiccrisis on global large-scale plant construction can be seen from themuch lower level of order intake and the current reluctance ofcustomers to award new projects. Against this background and giventhe variation in project structure and the state of completion ofprojects from year to year, Linde continues to assume that it willnot be able to achieve the same high level of sales in the 2009financial year as in 2008. Nevertheless, the target for our operatingmargin remains at 8 percent.N.B.: To coincide with the publication of our quarterly report, ateleconference for analysts will take place today at 2pm (Germantime) in English with Georg Denoke, CFO of Linde AG. Journalists willhave the opportunity to listen to the conference live by dialling+49.69.589.99-0509. Please tell the operator your name and the nameof your company. Following the teleconference, you will be able tohear a recording of the event by calling +49.30.726.167-224. Pleasegive the following reference number: 847120.The Linde Group is a world leading gases and engineering company withalmost 50,000 employees working in around 100 countries worldwide. Itachieved sales in the 2008 financial year of 12.7 billion euro. Thestrategy of The Linde Group is geared towards sustainableearnings-based growth and focuses on the expansion of itsinternational 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 businessareas, regions and locations across the world. Linde is committed totechnologies and products that unite the goals of customer value andsustainable development.For more information, please see The Linde Group online athttp://www.linde.comFor additional information:Press Investor RelationsUwe Wolfinger Thomas EisenlohrTelephone: +49.89.35757-1320 Telephone: +49.89.35757-1330* Operating profit: EBITDA before non-recurring items, includingshare of net income from associates and joint ventures.http://hugin.info/125064/R/1351783/326831.pdf --- End of Message ---Linde AGKlosterhofstrasse 1 Munich GermanyWKN: 648300; ISIN: DE0006483001; Index: CDAX, DAX, HDAX, Prime All Share;Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Niedersächsische Börse zu Hannover, Regulierter Markt in Bayerische Börse München, Regulierter Markt in Börse Berlin, Regulierter Markt in Börse Düsseldorf, Regulierter Markt in Börse Stuttgart, Regulierter Markt in Frankfurter Wertpapierbörse, Regulierter Markt in Hanseatische Wertpapierbörse zu Hamburg;
Datum: 02.11.2009 - 07:30 Uhr
Sprache: Deutsch
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