Linde plc · NASDAQ:LIN
Linde — Analysts' Conference 2003
51 slides from Linde's conference presentation, Mar 27, 2003
Slide 1: Analysts' Conference, March 27, 2003
Analysts‘ Conference, March 27, 2003 Analysts‘ Conference 2003 Seite 1
Slide 2: Linde Group FY 2002
Linde Group FY 2002 • Slight decline in sales due to drop in domestic sales • Drop in EBITA compensated by lower interest charge and reduced tax rate • Income from the sale of Dresdner Bank stake (165 million €) offset by significant one-off expenses • 240 million € earnings in line with last year (
Slide 3: Sales by regions (Total 8,726 million €)
Linde Group Sales by regions (Total 8,726 million €) 4,362 4,449 million € 2,196 2001 2002 1,994 1,675 1,479 641 478 122 163 Germany Rest of Europe Americas Asia Africa/Australia Analysts‘ Analysts‘ Conference 2003 2003 Conference Seite 3 3
Slide 4: Maintained leading market position in all business fields
Linde Group Maintained leading market position in all business fields Europe World Linde Gas 1 5 Linde Engineering Market Leader* Material Handling 1 1 Refrigeration 1 2 Analysts‘ Analysts‘ Conference 2003 2003 Conference Seite 4 4
Slide 5: Income Statement
Linde Group Income Statement • Interest result improved • Tax rate lower due to Dresdner Bank sale in million € 2001 2002 ∆ Sales 8,833 8,726 - 1.2 % Sales ex currencies + 0.7 % EBITDA 1,519 1,436 - 5.5 % EBITA 764 647 - 15.3 % Goodwill 114 124 + 8.8 % EBIT 650 523 - 19.5 % Financial result - 203 -
Slide 6: Group cash flow, capex and capital employed
Linde Group • Strong cashflow (+14.3 %) • Investment discipline has led to reduced capex (incl. financial assets) • Capital employed reduced by 767 million € in million € 2001 2002 ∆ Earnings per share 2.02 2.01 - 0.5 % Earnings per share pre goodwill 2.98 3.05 + 2.3 % Cash flow from operating activ
Slide 7: Financial situation
Linde Group Financial situation • Improved interest coverage ratio • Lower gearing in million € 2001 2002 EBITDA 1,519 1,436 Net interest expense 209 170 EBITDA / Net interest expense 7.3 8.4 Net debt 3,807 3,313 Equity, minority interests 4,356 4,119 Capital employed* 8,163 7,432 Net debt / capital
Slide 8: Conversion of ROCE - Group
Linde Group Conversion of ROCE- Group old new +Interest expenses for pensions EBTA EBTA +Interest expenses +Interest expenses ROCE = + Pension Provisions Capital Capital employed employed Analysts‘ Analysts‘ Conference 2003 2003 Conference Seite 8 8
Slide 9: Conversion of ROCE - Divisions
Linde Group Conversion of ROCE- Divisions old new +Interest expenses for pensions EBITA EBITA ROCE = +Pension provisions +Goodwill Operating Operating Capital Capital employed employed Analysts‘ Analysts‘ Conference 2003 2003 Conference Seite 9 9
Slide 10: ROCE in Comparison
Linde Group ROCE in Comparison 2001(old) 2001(new) 2002 Linde Gas 18.7% 9.1% 9.6% Linde Engineering 26.6% 14.9% 13.3% Material Handling 19.1% 13.1% 8.7% Refrigeration 7.5% 4.2% 5.1% Group 9.0% 7.9% 7.0% Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 10 10
Slide 11: Pension obligations - different systems
Linde Group Pension obligations- 2 different systems I II Internally financed Externally funded pension obligations pension obligations Mainly in Germany Mainly in the USA, UK, CH, N, NL and FIN Gross Obligation (DBO): 1,015 mio € Gross Obligation (DBO): 794 mio € Plan Assets: 653 mio € Analysts‘ Co
Slide 12: Pension obligations
Linde Group Pension obligations • Net Obligation: 1,156 million € in million € 2002 Defined Benefit Obligation 1,809 Of which internally financed 1,015 Of which externally funded 794 Fair value of Plan assets - 653 Net Obligation 1,156 Unrecognized actuarial losses - 141 Limitation (IAS 19.58) 8 Pro
Slide 13: Gas and Engineering
Gas and Engineering Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 13 13
Slide 14: Gas and Engineering results
Gas and Engineering • Higher sales • Improved operating profit in million € 2001 2002 ∆ Sales 4,835 4,839 + 0.1 % EBITDA 1,104 1,110 + 0.5 % EBITA 651 659 + 1.2 % Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 14 14
Slide 15: Gas: FY 2002 and outlook
Linde Gas FY 2002 … • Stagnating sales due to currency & natural gas price effects • Limited profit increase due to one - off items, currencies, shift in the portfolio and higher R&D & start- upcost for INO Outlook … • Future growth driven by healthcare and on - site business • Cost reduction of 150
Slide 16: Gas financial results
Linde Gas • Ex currency and natural gas price effects plus 4.4 % in sales • Slight improvement of operating profit • Capex ratio down to 10.6 % (previous year 11.6 %) in million € 2001 2002 ∆ Sales 3,875 3,880 + 0.1 % Sales (ex currencies & natural gas) + 4.4 % EBITDA 1,037 1,034 - 0.3 % Margin 26.8
Slide 17: Hydrogen and helium sales growth segments
Linde Gas FY 2002- Good performance in selected growth segments • Hydrogen sales decreased from 249 to 242 million € - Ex natural gas price effects, sales rose by 13% • Helium sales increased from 54 to 59 million €, plus 9.3% - Joint Venture with Sonatrach in Algeria gives Linde access to its own h
Slide 18: Healthcare: FY 2002 and outlook
Healthcare FY 2002 … • Growth of 7.4 % (+ 12.6 % ex currency) • EBITA in the range of 20% - plus 10.3 % in 2002 (+ 17 % ex currency) Outlook… • Strong sales growth ahead • Higher R & D costs in million € 2001 2002 2006e Institutional Care / Homecare 447 464 > 670 INO 81 102 > 240 GEMI, LMS 4 5 > 40
Slide 19: Institutional / Homecare sales in 2002
Healthcare Institutional / Homecare – 464 million € sales in 2002 • Institutional (approx. 5 % annual growth rate est.) - Enhancement of marketing, sales & service efficiency - Differentiation by offering added value to doctors & pharmacists - Focus on therapies • Homecare (approx. 20 % annual growt
Slide 20: INO sales in 2002
Healthcare INO – 102 million € sales in 2002 (+ 26 %, ex currency + 32 %) • Revised sales expectations due to - slow start in Europe - one-year delay in the roll-out of new products INO 18 % • Annual growth of appx. 25 % for the upcoming 2 years - 2003e sales: > 120 million € - 2004e sales: > 150 mi
Slide 21: Engineering: FY 2002 and outlook
Linde Engineering FY 2002 … • Order intake plus 24.2% • Cooperation with BOC starts to pay off Outlook … • Order situation points to promising future sales • Low risk profile Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 21 21
Slide 22: Engineering financial results
Linde Engineering • Flat operating profit • Stable margin in million € 2001 2002 ∆ Sales 1,047 1,036 - 1.1 % EBITDA 67 76 + 13.4 % EBITA (incl. interest income) 52 53 + 1.9 % Margin 5.0 % 5.1 % Capital employed 475 502 + 5.7 % ROCE 14.9 % 13.3 % Cashflow 44 184 Capex 38 29 - 23.7 % Analysts‘ Confere
Slide 23: Leading market positions in most activities
Linde Engineering Leading market positions in most activities - market share in Natural Gas with exp. overproportionate growth - 320 mio € 600 mio € Olefins Total Market 25 % 27 % Volume in 2003 1,250 mio € 2,200 mio € 15% Hydrogen / Syngas / Gas Total 7,380 mio € 250 mio € Natural Gas 7% 200 mio €
Slide 24: New Projects: order intake
Linde Engineering New Projects • Order intake + 24.2 % • Strong demand across all segments in million € 2002 Olefins 361 Natural Gas 539 Syngas 167 Air Separation 217 Others 209 TOTAL 1.493 Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 24 24
Slide 25: Material Handling
Material Handling Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 25 25
Slide 26: Material Handling: FY 2002 and outlook
Material Handling FY 2002 … • Lower sales caused by market decline • Market pressure and lower utilization rate hurt profitability Outlook … • Significant restructuring measures needed for sustainable earnings recovery Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 26 26
Slide 27: Material Handling financial results
Material Handling • Operating profit declined by 38.3 % • Reduced Capex, higher Cashflow in million € 2001 2002 ∆ Sales 3,071 2,979 - 3.0 % EBITDA 512 433 - 15.4 % EBITA 240 148 - 38.3 % Margin 7.8 % 5.0 % Capital employed 2,016 1,810 - 10.2 % ROCE 13.1 % 8.7 % Cashflow 413 462 + 11.9 % Capex 433 40
Slide 28: TRIM.100 – Optimization of the brand alliance
Material Handling TRIM.100 – Optimization of the brand alliance Linde Still OM Komatsu • Marketing Optimization • Location Optimization • Logistics of purchasing and distribution Optimization across all brands Optimization across the two groups and all brands • Positioning of brands • Purchasing • C
Slide 29: Refrigeration
Refrigeration Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 29 29
Slide 30: Refrigeration: FY 2002 and outlook
Refrigeration FY 2002 … • Sales on last year‘s level • Cost savings eaten up by market Outlook … • Additional measures will lead to further cost reduction Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 30 30
Slide 31: Refrigeration financial results
Refrigeration • Operating profit on last year‘s level • ROCE has improved in million € 2001 2002 ∆ Sales 887 879 - 0.9 % EBITDA 30 32 + 6.7 % EBITA 10 10 Margin 1.1 % 1.1 % Capital employed 372 370 - 0.5 % ROCE 4.2 % 5.1 % + 21.4 % Cashflow 94 36 - 61.7 % Capex 31 33 + 6.5 % Analysts‘ Conference Ana
Slide 32: First two months 2003
First two months 2003 Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 32 32
Slide 33: Sales first two months 2003
First 2 Months 2003 Sales decreased to 1,184 million € (minus 2.1 %) Ex currency plus 3.6 % in million € Per 02/02 Per 02/03 ∆ Gas and Engineering 679 689 + 1.5 % Linde Gas 652 641 - 1.7 % Linde Engineering 44 61 + 38.6 % Material Handling 462 430 - 6.9 % Refrigeration 67 62 -7.5 % Group 1,210 1,184
Slide 34: Order intake first two months 2003
First 2 Months 2003 Order Intake up to 1,425 million € (plus 4.7 %) in million € Per 02/02 Per 02/03 ∆ Gas and Engineering 736 805 + 9.4 % Linde Gas 651 641 -1.5 % Linde Engineering 90 181 + 101.1 % Material Handling 486 486 -- Refrigeration 135 132 - 2.2 % Group 1,361 1,425 + 4.7 % Analysts‘ Confer
Slide 35: Outlook
Outlook Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 35 35
Slide 36: Restructuring Programs until 2004
Outlook Restructuring Programs until 2004 - 275 million € cost savings in total- in million € Cost saving Provisions Linde Gas 150 54 Refrigeration 25 21 TRIM.100 100+ 62 Total 275 137 Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 36 36
Slide 37: Expectations for FY 2003
Outlook Expectations for FY 2003 Group: • Slight growth in sales • Noticeable improvement of EBITA • Linde Gas: Sales growth, increase in operating profit • Linde Engineering: Sales and profit growth • Material Handling: Slight increase in sales, sustainable profit growth • Refrigeration: Sales and
Slide 38: Midterm ROCE Targets
Outlook Midterm ROCE Targets • Group: 10 % • Linde Gas: 11 % • Linde Engineering: 16 % • Material Handling: 16 % • Refrigeration: 8% Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 38 38
Slide 39: Group Strategy by Divisions
Outlook Group Strategy by Divisions • Linde Gas: Focus of our growth efforts lies on Linde Gas • Linde Engineering: Strengthen technology leadership • Material Handling: Top Priority - Reorganization and optimization TRIM.100 will be speeded up • Refrigeration: New legal structure leaves all options
Slide 40: Appendix
Appendix Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 40 40
Slide 41: Financial situation (incl. pension provisions)
Linde Group Financial situation (incl. pension provisions) in million € 2001 2002 EBITDA 1,581 1,497 Net interest expense 271 231 EBITDA / Net interest expense 5.8 6.5 Pension provisions 1,063 1,078 Net debt 3,807 3,313 Net debt incl. pension provisions 4,870 4,391 Equity, minority interests 4,356 4
Slide 42: One-off items burdened the result
Linde Group Material One - off items burdened the result in million € Q1 Q2 Q3 Q4 Σ Sale of Dresdner Bank Holdings * 165 165 Restructuring costs and provisions -137 -137 Valuation adjustments on securities -29 -29 *Tax free Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 42 42
Slide 43: Pension related expenses and cash payments
Linde Group Pension related expenses and cash payments 2001 2002 Pension Cash Pension Cash In million € Expense Payments Expense Payments Defined Benefit Plans 1. Regular 96 68 100 74 (Of which financial items) (50) (53) 2. Special Contribution 22 Defined Contribution Plans 5 5 6 6 Total 101 73 106
Slide 44: Linde Gas - Sales by regions
Linde Gas Linde Gas- Sales by regions (Total 3,880 million €) 1.829 1.714 million € 1.275 2001 2002 1.154 828 833 58 64 Germany Rest of Europe Americas Asia / Africa / Australia Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 44 44
Slide 45: Linde Gas – Sales
Linde Gas Linde Gas – Sales in million € 2001 2002 ∆ Bulk 1,009 25% 1,039 26% + 3.0 % Cylinder 1,724 44% 1,672 42% - 3.0 % On-Site 703 18% 717 18% + 2.0 % Healthcare 532 13% 571 14% + 7.4 % Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 45 45
Slide 46: Development pipeline for new INO-based applications
Healthcare Development pipeline for new INO- based applications - exp. peak sales of around 700 million € until 2010- Therapeutic principle Stage of R&D Exp. filing date Neonatal intensive care Pre term neonates Phase 3 2005 Acute cardio-pulmonary disease Thoracic surgery Phase 3 2005 Chronic cardio
Slide 47: Material Handling - Sales by regions
Material Handling Material Handling- Sales by regions (Total 2,979 million €) 1.945 1.873 million € 2001 2002 806 758 130 145 117 133 73 70 Germany Rest of Europe Americas Asia Africa / Australia Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 47 47
Slide 48: Material Handling - Figures by brand
Material Handling Material Handling - Figures by brand Linde MH STILL OM Sales in million € 1,806 1,050 230 Orders Received in million € 1,850 1,047 265 Units sold 60,958 33,575 13,816 Employees 10,426 6,326 1,313 Not consolidated Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 48 48
Slide 49: Material Handling – Units sold by product group
Material Handling Material Handling – Units sold by product group 2001 2002 Counterbalanced trucks 58,965 54,938 Warehouse trucks 54,257 50,841 Consolidated Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 49 49
Slide 50: Refrigeration - Sales by regions
Refrigeration Refrigeration- Sales by regions (Total 879 million €) 542 518 million € 2001 2002 276 266 50 33 35 32 8 6 Germany Rest of Europe Americas Asia Africa / Australia Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 50 50
Slide 51: Investor Relations
Contact us Investor Relations Thomas Eisenlohr Tel.: +49 611 770 610 Fax: +49 611 770 690 [email protected] Marc Weisener Tel.: +49 611 770 468 Fax: +49 611 770 690 [email protected] Analysts‘ Conference Analysts‘ 2003 2003 Conference Seite 51 51