Linde plc · NASDAQ:LIN
Linde — FY2003 Earnings Presentation
33 slides from Linde's earnings presentation, Mar 24, 2004
Slide 1: Analysts' Conference Full Year Results 2003
Analysts‘ Conference Full Year Results 2003 24th March, 2004 Dr. Wolfgang Reitzle, CEO Analysts‘ Conference 2003 Seite 1 1
Slide 2: Highlights FY 2003
Linde Group Highlights FY 2003 ¾ Economic headwind, especially in Material Handling ¾ Sales and EBITA before special items have met our forecast ¾ Currency development negatively impacts performance of Linde Gas ¾ Restructuring programs are fully on track ¾ Financial result improved by €48 million ¾
Slide 3: Growth in sales and earnings despite weak economy
Linde Group Growth in sales and earnings despite weak economy and unfavorable currency development. Analysts‘ Conference 2003 Seite 3 3
Slide 4: Key Financials FY 2003
Linde Group Key Financials FY 2003 (in € million) -2.6% +3.0% +3.5% +1.8% (excl. curreny) +7.9% (excl. curreny) +9.3% (excl. curreny) 9.322 9.079 8.992 671 8.726 648 Margin: 7.4% 7.5% Order Intake Sales EBITA (before special item s) Analysts‘ Conference 2003 2002 2003 Seite 4 4
Slide 5: Special Items – €140 million in FY 2003
Linde Group Special Items – €140 million in FY 2003 Provisions taken in …. in € million Cost savings FY 02 Q3/03 Q4/03 Linde Gas 150 54 10 Refrigeration 25 21 TRIM.100 150 62 40 Headquarter 20 Material Handling Australia 20 Transaction & Disposal costs 50 TOTAL 325 137 70 70 Analysts‘ Conference 200
Slide 6: Key Financials FY 2003
Linde Group Key Financials FY 2003 Depreciation + Amortization Capital Expenditure* Free Cash Flow** by segment by segment (incl. leasing) by segment in € million 2002 2003 in € million 2002 2003 in € million 2002 2003 Linde Gas 530 517 Linde Gas 401 397 Linde Gas 364 329 Linde Linde Linde Engineeri
Slide 7: Net debt reduced by €372 million
Linde Group Net debt reduced by €372 million (incl. Pensions, total reduction of €510 million) Net debt incl. pensions reduced by €1,367 million over the last 3 years 3,313 2,941 303 12 81 Net Debt Financial Liabilities Cash & Net Debt 2002 Liabilities From Cash Equivalents, 2003 Financial Securitie
Slide 8: Linde Gas
Linde Gas Good growth in sales and earnings excluding currency impact and special items. Analysts‘ Conference 2003 Seite 8 8
Slide 9: Linde Gas sales by region
Linde Gas Sales of €3,843 million (-1.0%), excl. currency +6.2% % ncy € million +1.6 rre c u 1,829 1,858 xcl. e cy . 5% e n +9 -9. u rr ncy 2% c e % l. rr +3.0 ex c c u 1% xcl. 858 900 8. e 833 817 +1 - .5% 5.9% 7 +1 +9.5% 254 239 63 69 Germany Rest of Europe North America South America Asia/Pacific
Slide 10: Linde Gas EBITA: stable margin
Linde Gas EBITA: €598m before special items (-1.3%), excl. currency +4.6% - Stable margin - ncy rr e c u xcl. e . 6% +4 -1.3% Margin: 2002 2003 606 598 15.6% 15.6% EBITA Analysts‘ Conference 2003 2002 2003 excl. currency Seite 10 10
Slide 11: Linde Gas EBITA bridge 2002 to 2003
Linde Gas EBITA: Bridge from actual 2002 to actual 2003 result in € million 60 74 606 20 598 36 49 27 2002 Volume Price Cost Currency Others Fit For 2003 Increase Increase Effects Future Analysts‘ Conference 2003 Seite 11 11
Slide 12: Highest growth for On-site & Healthcare, declining Cylinder Business
Linde Gas Highest growth for On-site & Healthcare, declining Cylinder Business 14% 15% 2002 26% 27% 2003 Bulk Cylinder 18% On-site 19% Healthcare 42% 39% in € million 2002 2003 ∆ / ∆ excl. currency Bulk 1,052 1,047 -0.5% / +5.5% Cylinder 1,651 1,555 -5.8% / +0.9% On-Site 725 772 +6.5% / +12.2% Healt
Slide 13: Healthcare: Good prospects despite lower targets
Linde Gas Healthcare: Good prospects despite lower targets ¾ Total sales €575 million (+0.9%), +10.6% excl. currency ¾ INO sales €104 million (+2.0%), +18.6% excl. currency ¾ Homecare acquisition adds €10 million sales in 2004 ¾ Reduced 2006 guidance due to currency and delay in INO approvals - 2006
Slide 14: 2003: A good year for the On-site Business
Linde Gas 2003: A good year for the On-site Business ¾ Major projects with order volume of €350 million ¾ Additional 28 small projects with Capex of approx. €50 million ¾ Good order situation in Eastern Europe (Capex of approx. €150 million) Client Location Type Start Avesta Polarit Stainless Tornio
Slide 15: Fit For Future program fulfills targets for 2003
Linde Gas Fit For Future - program fulfills targets for 2003 150 49 35 EBITA € million 5 4 6 Supply SG&A Healthcare Purchase HQ 2003 2005 -34 -124 Employees -264 -422 -750 Analysts‘ Conference 2003 Seite 15 15
Slide 16: Linde Engineering
Linde Engineering Significant improvement in sales and profit, order backlog higher than €2 billion. Analysts‘ Conference 2003 Seite 16 16
Slide 17: FY 2003: Another strong year for Linde Engineering
Linde Engineering FY 2003: Another strong year for Linde Engineering .6% .1% € million 2 € million 5 +2 +1 61 1.270 53 1.036 EBITA margin 5.1% 4.8% Sales EBITA 2002 2003 Analysts‘ Conference 2003 Seite 17 17
Slide 18: Excellent project situation - Order intake 2003
Linde Engineering Excellent project situation - Order intake 2003: €1,474 million - € million 2002 2002 2003 2003 Olefins 361 24% 157 11% Natural Gas 539 36% 410 28% Syngas 167 11% 198 13% Air Separation 217 15% 476 32% Others 209 14% 233 16% Total 1,493 100 % 1,474 100 % Analysts‘ Conference 2003 S
Slide 19: Material Handling
Material Handling Improved profitability. Weak markets in Europe (especially Germany) and special items burden overall performance. Analysts‘ Conference 2003 Seite 19 19
Slide 20: Material Handling sales up 2.8%
Material Handling Sales up 2.8%, despite difficult market situation EBITA €156 million (+5.4 %), before special items € million . 8% € million . 4% +2 +5 3.063 2.979 148 156 EBITA margin 5.0% 5.1% Sales EBITA 2002 2003 Analysts‘ Conference 2003 Seite 20 20
Slide 21: TRIM.100 program: cost reduction
Material Handling TRIM.100 program - €30 million cost reduction achieved in 2003 - Cost savings in € million 2005 50 SG&A 17% 2004 Sales 32% 70 Production & 2003 Quality 26% 30 Purchasing & Logistics 25% Analysts‘ Conference 2003 Seite 21 21
Slide 22: TRIM.100 program: workforce reduction
Material Handling TRIM.100 program - Expected workforce reduction for 2003 exceeded by 13% - Target Year Actual 500 2003 567 1.000 2004 1.250 2005 Analysts‘ Conference 2003 Seite 22 22
Slide 23: Refrigeration
Refrigeration Improved earnings in difficult market. Analysts‘ Conference 2003 Seite 23 23
Slide 24: Refrigeration 2003: Sales flat, EBITA increased
Refrigeration 2003: Sales flat, EBITA increased to €14 million € million - 1.5% € million .0% 0 +4 879 14 866 10 EBITA margin 1.1% 1.6% Sales EBITA 2002 2003 Analysts‘ Conference 2003 Seite 24 24
Slide 25: Linde Refrigeration: Details of the transaction
Linde Refrigeration Details of the transaction Time Frame: Deal signed: March, 15, 2004 Deal completion: End of Q2/Q3, 2004 (depends on decision of antitrust authorities) Price: €325 million €255 million cash and debt €70 million pensions and related obligations Risks: €50 million provisions to cove
Slide 26: Transaction Rationale for Linde
Linde Refrigeration Transaction Rationale for Linde ¾ Long term market structure in Refrigeration unfavorable ¾ Long term survival for Linde Refrigeration is secured ¾ Margins far below rest of the group ¾ Focus on high-growth and high-earnings business segments Analysts‘ Conference 2003 Seite 26 26
Slide 27: First months 2004
First 2 months 2004 Encouraging start to the year. Analysts‘ Conference 2003 Seite 27 27
Slide 28: Increased sales and order intake
First 2 months 2004 Increased sales and order intake Sales: €1,269 mill. Order Intake: €1,522 mill. +0.6% (+4.0% excl. currency) +7.2% (+11.4% excl. currency) 62 +16.1% 72 130 -1.5% 132 424 +9.2% 463 513 481 +6.7% 140 -14.3% 120 181 +54.7% 280 641 -2.5% 625 -2.5% 641 625 (+2.6% (+2.6% excl. curr.) e
Slide 29: Strategy & Outlook
Linde Group Strategy & Outlook Analysts‘ Conference 2003 Seite 29 29
Slide 30: Strategy
Strategy Group: Focus on high-growth & high-earnings business segments - Secure high market share in home markets - Grasp attractive opportunities in China and US - Build a balanced on-site portfolio with long-term profitability Gas - Take advantage of opportunities in Healthcare segment - Focus on
Slide 31: Outlook
Outlook Despite difficult economic environment we expect increased sales and operating profit for the Group ¾ Group: Sales increase, EBITA higher than 2003 ¾ Group: Capex (excl. financial assets) approx. €950 million (2003: €856m) ¾ Linde Gas: Increase in sales and EBITA (exl. currency) ¾ Linde Engi
Slide 32: Outlook Beyond 2004
Outlook Beyond 2004 ¾ Ongoing debt reduction, mid-term gearing goal: 50% ¾ Total cost reduction target of €300 million by end 2005 ROCE 2003 2005 Group 7.7 % 10 % Linde Gas 10.1 % 11 % Linde Engineering 14.8 % 16 % Material Handling 9.7 % 16 % Refrigeration 6.1 % Analysts‘ Conference 2003 Seite 32 3
Slide 33: Thank you for your attention
Thank you for your attention. Analysts‘ Conference 2003 Seite 33 33