Linde Reports Second-Quarter 2024 Results (Earnings Release Tables Attached)

Rhea-AI Summary

Linde plc (Nasdaq:LIN) reported strong second-quarter 2024 results, with sales reaching $8.3 billion, up 1% year-over-year, and underlying sales increasing by 3%. The company's adjusted operating profit rose 6% to $2.4 billion, with an adjusted operating profit margin of 29.3%, up 140 basis points. Adjusted earnings per share (EPS) grew 8% to $3.85. Linde's CEO, Sanjiv Lamba, highlighted the company's ability to grow its integrated industrial gas model while securing high-quality growth opportunities. For the full year 2024, Linde expects adjusted EPS to be in the range of $15.40 to $15.60, representing 9% to 11% growth year-over-year, excluding foreign exchange impacts.

Positive

• Sales increased by 1% to $8.3 billion, with underlying sales up 3%
• Adjusted operating profit grew 6% to $2.4 billion
• Adjusted operating profit margin expanded by 140 basis points to 29.3%
• Adjusted EPS increased by 8% to $3.85
• Full-year 2024 adjusted EPS guidance of $15.40 - $15.60, representing 9% to 11% growth year-over-year excluding FX
• Return on Capital (ROC) increased to 25.7%
• $2.1 billion returned to shareholders through dividends and stock repurchases

Negative

• Operating cash flow decreased 10% versus prior year
• APAC sales down 2% due to negative currency translation
• EMEA volumes decreased by 1%, primarily in the metals and mining end market

Financial Analyst

Linde's Q2 2024 results demonstrate resilience in a challenging macroeconomic environment. The company reported adjusted EPS of $3.85, up 8% year-over-year, surpassing expectations. This growth was driven by strong price attainment and productivity initiatives across all segments.

Key financial highlights include:

• Sales of $8.3 billion, up 1% with underlying sales growth of 3%
• Adjusted operating profit of $2.4 billion, up 6%
• Adjusted operating profit margin of 29.3%, expanding 140 basis points
• Return on Capital (ROC) increased to 25.7%

The company's ability to expand margins in a flat volume environment is particularly impressive. This demonstrates Linde's pricing power and operational efficiency. However, the 10% decrease in operating cash flow, primarily due to engineering project prepayment timing, warrants attention.

Linde's full-year 2024 adjusted EPS guidance of $15.40 to $15.60 represents 9% to 11% growth year-over-year, excluding FX impacts. This outlook, coupled with the company's $4.7 billion contractual sale of gas project backlog, positions Linde for continued growth despite economic uncertainties.

Investors should note the company's commitment to shareholder returns, with $2.1 billion returned through dividends and stock repurchases in Q2. This balanced approach to growth investment and shareholder remuneration enhances Linde's appeal as a stable, long-term investment in the industrial gas sector.

Market Research Analyst

Linde's Q2 2024 performance offers valuable insights into broader industrial trends. The company's flat volume growth, particularly in the EMEA region's metals and mining end market, suggests ongoing challenges in these sectors. However, Linde's ability to achieve 3% price attainment indicates strong market positioning and pricing power.

Segment analysis reveals:

• Americas: 4% underlying sales growth, driven by pricing
• APAC: Stable underlying sales, reflecting regional economic pressures
• EMEA: 2% underlying sales growth, despite volume declines
• Engineering: 10% sales increase, with a robust $3.2 billion backlog

The Engineering segment's performance is particularly noteworthy, as it suggests ongoing investment in industrial infrastructure. This could be a leading indicator of future demand for industrial gases.

Linde's focus on high-quality projects and continued margin expansion in a challenging environment demonstrates the resilience of its business model. The company's ability to maintain growth and profitability amid economic uncertainties positions it well against competitors in the industrial gas sector.

Looking ahead, Linde's guidance for 9% to 11% EPS growth (excluding FX) in 2024 suggests confidence in its ability to navigate ongoing macroeconomic challenges. This outlook, combined with the company's strong project backlog, indicates potential for continued outperformance in the industrial gas market.

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 / ACCESSWIRE / 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.

Live conference call	US Toll-Free Dial-In Number: 1 888 770 7292 UK Toll-Free Dial-In Number: 0800 358 0970 Access code: 6877110
Live webcast (listen-only)	https://www.linde.com/investors/financial-reports

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.

SOURCE: Linde plc

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FAQ

What were Linde's (LIN) second-quarter 2024 earnings per share?

Linde reported adjusted earnings per share (EPS) of $3.85 for the second quarter of 2024, representing an 8% increase compared to the prior year.

How much were Linde's (LIN) sales in Q2 2024?

Linde's sales for the second quarter of 2024 were $8.267 billion, up 1% compared to the prior year, with underlying sales increasing by 3%.

What is Linde's (LIN) full-year 2024 EPS guidance?

Linde expects full-year 2024 adjusted diluted earnings per share to be in the range of $15.40 to $15.60, representing 9% to 11% growth year-over-year, excluding foreign exchange impacts.

How much did Linde (LIN) return to shareholders in Q2 2024?

During the second quarter of 2024, Linde returned $2.1 billion to shareholders through dividends and stock repurchases, net of issuances.

What was Linde's (LIN) operating profit margin in the second quarter of 2024?

Linde's adjusted operating profit margin for Q2 2024 was 29.3%, which was 140 basis points above the prior year.