Linde plc · NASDAQ:LIN
Linde — Analyst Conference 2002
40 slides from Linde's conference presentation, Mar 27, 2002
Slide 1: Analyst Conference
Analyst Conference March 27, 2002 1
Slide 2: Year 2001 Group Summary
Year 2001 Group Summary • Good performance in a very challenging market environment • Earnings oriented policy across all business segments • Technological leadership and focused approach leave Linde well positioned for further growth 2
Slide 3: Linde Group
Linde Group • Sustained growth in sales • Operating profit of the three Business Segments plus 10.6 percent • Higher centrally allocated corporate cost • Results in line with forecast Amount in million € 2001 2000 Change % Sales 9,076 8,450 7.4 % EBITDA 1,375 1,345 2.2 % Depreciation - 580 - 570 1.8
Slide 4: Linde Group Key numbers
Linde Group Key numbers Amount in million € 2001 2000 Change % ROCE 9.0 % 9.8 % EPS before Goodwill 2.39 2.29 4.4 % EPS after Goodwill 3.30 3.18 3.8 % Cash flow* 981 903 8.6 % Cash flow per share 8.23 7.57 8.7 % Capex 717 979 - 26.8 % Change in working capital 58 -198 Capital employed (average) 8,19
Slide 5: Gas and Engineering
Gas and Engineering 5
Slide 6: Gas and Engineering
Gas and Engineering • Combination of strength within one business segment • Focus on synergies between the two divisions • Strong growth in sales and profits Amount in million € 2001 2000 Change % Sales 4,996 4,527 10.4 % EBITA 626 558 12.2 % ROCE 19.1 % 15.8 % Cash flow 853 797 7.0 % Capex 475 794
Slide 7: Gas Summary 2001
Linde Gas Summary 2001 • Good performance in 2001 • Sales and profit increase in Europe • Stable development in South America despite economical turbulences • Improved market position in North America • Ongoing successful AGA integration • Target of 50 million € cost savings achieved • Strongest gro
Slide 8: Gas
Linde Gas • Significant increase in profitability • Capex-ratio already in line with mid-term target • Major ROCE improvement in line with stabilisation of capital employed Amount in million € 2001 2000 Change % Sales 3,877 3,784 2.5 % EBITDA 1,036 965 7.4 % margin 26.7 % 25.5 % EBITA 575 519 10.8 %
Slide 9: Gas - Sales by Regions
Linde Gas - Sales by Regions 2001: 3,877 Mio. € [+ 2.5 % (+ 4.4 %*)] / 2000: 3,784 Mio. € (Currency effect: - 0.3 %) 1000 Mio. € 952 908 822 2001 789 796 782 800 2000 600 507 497 416 419 400 324 326 200 51 49 0 Germany W. Europe N. Europe East. N. /Centr. S. America Asia/Pacific Europe America [%] +
Slide 10: Gas: Growth driver Healthcare
Linde Gas Growth driver Healthcare • Focus on Homecare and INO • 2002: Overall annual growth of 15-20 percent 1,100 Mio. € Homecare/Institutional INO 509 Mio. € 750 461 Mio. € 416 428 350 45 81 2000 2001 2006 10
Slide 11: Gas - Strategy
Linde Gas - Strategy Regions Business Areas Europe West Cylinder • Strengthen leadership positions by • Strengthen business with high stronger presence in large countries profitability • Continue to focus on large tonnage clusters Bulk • Grow business with new applications Europe East and customer o
Slide 12: Gas: Restructuring programs with large cost saving potential
Linde Gas Restructuring programs with large cost saving potential • Reengineering of business processes • SG&A cost reduction • Purchasing • Reorganisation of US-Gas business • Standardisation of IT € 250 m € 150 m • Production / Distribution • Purchasing • Personnel € 100 m 2000 2001 2002 2003 2004
Slide 13: Gas: Medium Term Targets
Linde Gas Medium Term Targets • Strengthen leadership in Europe • Improve position in North-/South America • Expand into new growing segments (Hydrogen, Syngas, Healthcare) • Become the most profitable gas company in the world Financials • Sales growth 2 x GDP • EBITDA-Margin > 30 % • ROCE* 20 % *be
Slide 14: Gas Outlook 2002
Linde Gas Outlook 2002 • Sales growth and improvement of EBITDA-margin and ROCE • Completion of first restructuring program / start of second program • Start of INO sales in Europe • Capex-ratio below 12 percent 14
Slide 15: Engineering Summary 2001
Linde Engineering Summary 2001 • Major contracts awarded • Extended position in new growth markets • Strengthened global competence as plant constructor and provider • Successfully positioned as a technology partner in one of the fastest growing markets in the energy sector (natural gas processing)
Slide 16: Engineering
Linde Engineering • Sales and profit growth of more than 30 per cent • Stable operating margin • Good order backlog (2,257 million € per 12/2001) Amount in million € 2001 2000 Change % Sales 1,218 909 34.0 % EBITDA 68 59 15.3 % EBITA 51 39 30.8 % margin 4.2 % 4.3 % ROCE 26.6 % 22.0 % Cash flow 53 51
Slide 17: Engineering: Order intake in 2001 by project size
Linde Engineering Order intake in 2001 (1,202 Mio. €) - by project size - Mio. € 600 44.4 % 500 534 400 300 20.3 % 19.6 % 200 15.7 % 244 235 189 100 0 Order value in Mio. € 0-3 3-10 10-25 > 25 Number of orders 1897 35 12 7 17
Slide 18: Engineering: Order intake by regions
Linde Engineering Order intake in 2001 vs 2000 - by regions - 2001 2000 Europe 589 49 % 560 41 % America 176 15 % 206 15 % Asia 411 34 % 575 42 % Others 26 2% 17 2% Total (in Mio. €) 1.202 100 % 1.358 100 % 18
Slide 19: Engineering Medium-term targets
Linde Engineering Medium-term targets • Focus on growth drivers (LNG, HyCo, Olefins / ASU) • Intensify global cooperations with key business partners • Extension of technology leadership Financials • Sales 1,3 - 1,5 bn € • EBITA-margin 4-5% • ROCE > 25 % 19
Slide 20: Engineering Outlook 2002
Linde Engineering Outlook 2002 • Promising project situation • Start of the cooperation with BOC • Increase of sales • Change to POC 20
Slide 21: Material Handling
Material Handling 21
Slide 22: Material Handling Summary 2001
Material Handling Summary 2001 • Improved global position despite difficult market conditions • World market share (order intake) increased from 18.5 to > 20 percent • Modernization and reorganisation of factories in Germany, France and Italy • Cooperation with Komatsu led to growth and profitabilit
Slide 23: Material Handling
Material Handling • Significant sales increase • Cash flow generator • Under-proportionate EBITA-growth due to restructuring program Amount in million € 2001 2000 Change % Sales 3,158 2,951 7.0 % EBITDA 378 363 4.1 % EBITA 255 244 4.5 % margin 8.1 % 8.3 % ROCE 19.1 % 19.5 % Cash flow 288 276 4.4 % C
Slide 24: Material Handling: Well diversified customer portfolio
Material Handling Good growth in spite of weak market conditions Well diversified customer portfolio Sales of CB trucks Sales of warehouse trucks In units (2001): 58,965 + 7.6 % In units (2001): 54,257 + 8.3 % By industries: (Germany, sales: 14,552) By industries: (Germany, sales: 13,138) Constructi
Slide 25: Material Handling: Innovative truck generation
Material Handling .... Innovative truck generation offering customers and Linde a variety of benefits • Important advantages for our customers • Increased turnover of merchandise • Lower energy consumption • Significant noise reduction • Innovative design with improved ergonomics • Reduced productio
Slide 26: Material Handling Medium-term targets
Material Handling Medium-term targets • Extend European market dominance • Enhance synergies with Komatsu • Intensify global expansion (focus on USA and Asia) • Enlarge service business (rental, leasing & fleet management activities) Financials • Sales growth > GDP • EBITA-margin >9% • ROCE > 20 % 2
Slide 27: Material Handling Outlook 2002
Material Handling Outlook 2002 • Roll-out of new truck generations (Linde, FIAT) • More complete product range leads to increased market coverage • Improvement of productivity / reduction of production cost in all factories • Market development for 2002 is difficult to predict • Best estimate: Sales
Slide 28: Refrigeration
Refrigeration 28
Slide 29: Refrigeration Summary 2001
Refrigeration Summary 2001 • Restructuring program leads to increased profitability and productivity • Major measures: – Further concentration / reorganisation of factories and relocation of production to the Czech Republic – Improved organisational structure of sales networks on important European
Slide 30: Refrigeration
Refrigeration • Well positioned in difficult market environment • Restructuring program leads to rise in profitability • Reduction of capital employed supports major ROCE upturn Amount in million € 2001 2000 Change % Sales 887 935 - 5.1 % EBITDA 39 34 14.7 % EBITA 19 12 58.3 % margin 2.1 % 1.3 % ROC
Slide 31: Refrigeration: Linde strengthened market position
Refrigeration Linde strenghtened market position in difficult environment Market volume in `000 units Linde`s market share in % (Modular line) (Modular Line) 600 527 50,0 495 42,3 41,1 500 40,0 400 30,0 300 20,0 15,2 14,6 200 155 161 10,0 100 0 0,0 Europe World Europe World 2001 2000 31
Slide 32: Refrigeration: Evolution program
Refrigeration Evolution 5 program ... offers advantages both to customers and Linde • Improved efficiency for our customers (volume, energy consumption) • Innovative design as additional growth driver • New program is based on a modular system that leads to .. • Shorter lead time • Higher flexibilit
Slide 33: Refrigeration Medium-term targets
Refrigeration Medium-term targets • Accomplish cost-leadership • Further improvement of global Key-Account Management • Cautious entry into the US market Financials • Sales growth > GDP • EBITA-margin >6% • ROCE > 20 % 33
Slide 34: Refrigeration Outlook 2002
Refrigeration Outlook 2002 • Completion of the restructuring program • Further consolidation of factories (closure of one more factory) • Realisation of more than 30 million € cost savings • Global market introduction of Evolution 5 program • Improvement of operating profit in spite of flat sales 34
Slide 35: First 2 months 2002: Sales
First 2 months 2002 Sales Amount in million € 02/02 02/01 Change % Linde Group Domestic 272 300 - 9.3 % Foreign 938 889 5.5 % Total 1,210 1,189 1.8 % (excl. Engineering) (1,184) (1,155) (2.5 %) Gas and Engineering 679 670 1.3 % Linde Gas 652 636 2.5 % Linde Engineering 44 44 0.0 % Material Handling
Slide 36: First 2 months 2002: Order intake
First 2 months 2002 Order intake Amount in million € 02/02 02/01 Change % Linde Group Domestic 314 324 - 3.1 % Foreign 1,047 1,014 3.3 % Total 1,361 1,338 1.7 % (excl. Engineering) (1,276) (1,268) (0.6 %) Gas and Engineering 736 707 4.1 % Linde Gas 651 636 2.4 % Linde Engineering 90 76 18.4 % Materi
Slide 37: Stock options program
Stock options program • Capital market oriented management incentive program • Motivation for management to increase shareholder value • Focus on long-term effects Details • Creation of 15.36 million € contingent capital (corresponds to 5.03 per cent of share capital) • Issue of 6 million option rig
Slide 38: Linde Group Outlook 2002
Linde Group Outlook 2002 • Growth in sales and earnings • Debt reduction 300 million € • Capex of about 700 million € 38
Slide 39: Thank you for your attention!
Thank you for your attention! 39
Slide 40: Contact us
Contact us Brita Tornow Head of Corporate Communications, Investor Relations Tel. + 49 (0)611 770 391 Fax + 49 (0)611 770 690 [email protected] Thomas Eisenlohr Investor Relations Tel. + 49 (0)611 770 610 Fax + 49 (0)611 770 690 [email protected] Marc Weisener Investor Relations Tel. + 4