Linde plc · NASDAQ:LIN
Linde — FY2012 Earnings Presentation
43 slides from Linde's earnings presentation, Mar 7, 2013
Slide 1: Full year results 2012. Determination.
Full year results 2012. Determination. Analysts’ Conference Call 07 March 2013 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements about Linde AG (“Linde”) and their respective subsidiaries and businesses. These include, without limitation, those concerning the strategy of an integrated group, future growth potential of markets and products, profitability in speci
Slide 3: Agenda
Agenda Part 1 Prof. Dr Wolfgang Reitzle 1. Performance 2012 2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends 3. Outlook Part 2 Georg Denoke 1. Operational Performance & Capex 2. Financial Performance & Dividend 3. Summary Appendix 3
Slide 4: Performance – 2012 Profitable growth
Performance – 2012 Profitable growth. 2012 2011 yoy in % Revenue [€m] 15,280 13,787 +10.8% Operating Profit* [€m] 3,530 3,210 +10.0% Operating Margin [€m] 23.1% 23.3% - 20bp Operating Cash Flow [€m] 2,522 2,426 +4.0% EPS reported [€] 7.03 6.88 +2.2% — Solid growth realised despite the unfavourable m
Slide 5: Group, revenue and operating profit by divisions
Group, revenue and operating profit by divisions Acceleration of growth in Q4 Revenue Operating Profit [€m] 15,280 [€ m] 3,530 13,787 +10.8% 3,210 +10.0% 12,591 11,061 +13.8% 27.5% 3,403 27.0% 3,041 +11.9% +1.2% 2,531 2,561 12.0% +2.6% 12.2% 195 304 312 128 -135 -185 2011 2012 2011 2012 Gases Engine
Slide 6: Business Performance HPO 2013 – 2016
Business Performance HPO 2013 – 2016: € 750 – 900 m additional gross cost savings — HPO 2009 to 2012: Upper end of target range achieved with € 780 m of accumulated gross cost savings — HPO 2013 to 2016: Ambitious continuation of the standardisation and optimisation of processes within an extended f
Slide 7: Mega-trends
Mega-trends Leveraging growth with our Gases & Engineering set-up Growth Markets Energy/Environment Healthcare 7
Slide 8: Mega-trend Growth Markets: Strong investments in future growth
Mega-trend Growth Markets Strong investments in future growth Around 50% of capex invested in Growth Markets Growth Market revenue on a strong growth track Gases capex 2009 – 2012 Growth Markets revenue including JVs [€bn] [€bn] 1.9 CAGR 2009 – 2012: 15% 1.4 4.5 1.3 1.0 4.1 1.0 0.6 0.7 3.7 0.6 0.8 0
Slide 9: Mega-trend Growth Markets: Growth Market leader
Mega-trend Growth Markets Growth Market leader Market size Mature Markets* Market leader in 4 out of 5 Growth Markets North Western Australia America Europe 2012 € 16 bn € 10 bn € 1 bn 2020E € 24 bn € 13 bn € 2 bn #1 Eastern Europe CAGR 5% 3% 9% #1 in Greater China Market size Growth Markets* Greate
Slide 10: Increasing intensity of industrial gases use in Growth Markets
Mega-trend Growth Markets Increasing intensity of industrial gases use in Growth Markets Industrial & medical gases consumption per capita 2010 vs. 2012 [€] Drivers USA Western Europe Increasing industrialisation in 32 34 54 58 Growth Markets Eastern Europe 5 6 China 3 4 Increasing wealth in South &
Slide 11: Mega-trend Energy/Environment
Mega-trend Energy/Environment Importance of new technologies & industrial gases applications NITROGEN METHANE HYDROGEN CARBON DIXOIDE OXYGEN EOR / EGR Cleaner fuels Clean Coal & Gas Gas-to-liquids — Build, own & — Build LNG-plants, terminals & fueling — CO2 separation, — Build, own and operate large
Slide 12: Opportunities resulting from shale gas
Mega-trend Energy/Environment Opportunities resulting from shale gas Global shale gas resources Opportunities for Linde [trillion cubic feet] Engineering North America — Natural gas processing plants — Ethane crackers Europe — LNG plants China 1,900 Order Intake for processing plants in the US 600 [
Slide 13: Mega-trend Healthcare: Attractive environment for growth
Mega-trend Healthcare Attractive environment for growth Market drivers Healthcare market 2012 vs. 2020 [€bn**] — Growing and ageing population +4% — High portion of untreated patients +2% — Increasing chronic diseases like sleep apnea 8.1 +10% and COPD 5.8 4.7 5.6 1.0 2.2 — Increasing wealth in Grow
Slide 14: Lincare: expansion to the global largest homecare market
Mega-trend Healthcare Lincare: expansion to the global largest homecare market Linde Healthcare development approach Share of revenue from Healthcare 2011 2012* Linde Group non-Healthcare Linde Group non-Healthcare Geographic expansion Linde Healthcare 91% 82% Business expansion 9% 9% Optimising 9%
Slide 15: Outlook: Determination. Mid-term targets
Outlook* Determination. 2013 Revenue Further increase vs. 2012 Operating Profit** At least 4 billion Euro Gases Division Revenue and operating profit increase vs. 2012 Engineering Division Revenue at 2012 level & operating margin of around 10% Mid-term targets 2012 2016 Operating Profit** [€] 3,530
Slide 16: Agenda
Agenda Part 1 Prof. Dr Wolfgang Reitzle 1. Performance 2012 2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends 3. Outlook Part 2 Georg Denoke 1. Operational Performance & Capex 2. Financial Performance & Dividend 3. Summary Appendix 16
Slide 17: Group, financial key indicators: Continuous EPS-growth
Group, financial key indicators Continuous EPS-growth EPS adjusted* ROCE adjusted* [€] 7.71 7.89 13.0% 6.89 12.5% 11.5% 4.59 10.4% 2009 2010 2011 2012 2009 2010 2011 2012 Operating Cash Flow ROCE reported [€m] 2,522 11.0% 2,422 2,426 10.3% 10.0% 2,142 7.7% 2009 2010 2011 2012 2009 2010 2011 2012 *(p
Slide 18: Gases Division, revenue by operating segment
Gases Division, revenue by operating segment Growth continued [€m] EMEA ASIA/PACIFIC AMERICAS Revenue Revenue Revenue 5,672 5,998 +5.7% 3,498 3,076 3,200 +13.7% 2,384 +34.2% +4.1%* +5.0%* +2.8%* 2011 2012 2011 2012 2011 2012 — Growth led by Eastern Europe — Growth in all regions with — Positive deve
Slide 19: Gases Division, operating profit by operating segment
Gases Division, operating profit by operating segment Growth continued [€m] EMEA ASIA/PACIFIC AMERICAS Operating profit/margin Operating profit/margin Operating profit/margin 1,634 1,700 +4.0% 872 935 768 +7.1% 535 +43.6% 28.8% 28.3% 28.3% 26.7% 22.4% 24.0% 2011 2012 2011 2012 2011 2012 Margin Devel
Slide 20: Gases Division, revenue by product areas
Gases Division, revenue by product areas Solid performance in a challenging environment [€m], comparable* (consolidated) +3.8%* 12,591 11,523 Healthcare +14.2%* 2,035 Healthcare 1,230 Including € 630 m of Lincare, the growth rate is 65.4% in Healthcare +4.0%* 2,921 Tonnage 2,809 Tonnage Adjusted for
Slide 21: Gases Division, project pipeline & market opportunities
Gases Division, project pipeline & market opportunities Strong project pipeline Amount of committed projects by on-stream date Development of market opportunities [€m] (12 months forward) ~800 ~800 ~750 ~700 ~200 [€bn] ~150 4.0 4.3 4.2 2.6 avg. 2010 2013E 2014E 2015E 2016E 2010 2011 2012 2013 to 201
Slide 22: Gases, capex: Development capex/sales ratio 2007-2012
Gases, capex Development capex/sales ratio 2007-2012 capex/sales ratio 15% 15% mid-term: 13% 13% average ~13% plus* 12% 11% ~2,100 capex [€m] 1,901 1,451 1,439 1,326 1,062 1,029 2007 2008 2009 2010 2011 2012 2013 Data 2007-2012 @ actual average fx rates at the end of the respective year * plus: addi
Slide 23: Engineering Division, key figures
Engineering Division, key figures Record operating profit — Order intake of around USD 600 m for equipment/gas processing plants for shale gas — More than 35% of order intake from Asia/Pacific — Project wins in Tonnage supported order intake and prove the synergetic set-up of Gases and Engineering O
Slide 24: Group, solid financial position: A year of significant investments
Group, solid financial position A year of significant investments Net debt Net debt/EBITDA [€bn] 8.5 8.1 [x] 6.4 6.1 2.5 2.6 2.5 5.5 5.1 2.3 1.9 1.6 2008 2009 2010 2011 30/09/ 31/12/ 2008 2009 2010 2011 LTM 31/12/ 2012 2012 30/09/ 2012 2012 — Large-scale acquisitions driver for increase in — Delever
Slide 25: Group, financial result and tax rate
Group, financial result and tax rate Financial Result [€m] Tax Rate -385 -329 -291 -305 23.9% -280 22.9% 22.1% 23.2% 21.5% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 25
Slide 26: Group, dividends
Group, dividends Proposed dividend increase by 8% to € 2.70 [€] 2.70 +8.0% 2.50 +13.6% 2.20 +22.2% +5.9% 1.80 stable 1.80 +13.3% 1.70 +10.0% +9.7% 1.50 +22.6% Change in Operating +5.4% -6.7% Profit +18.1%* 2006 2007 2008 2009 2010 2011 2012 Pay out 13.0% 30.0% 42.0% 51.0% 37.3% 36.5% 40.0% ratio * c
Slide 27: Linde – Investment Highlights
Fascinating Gases Linde – Investment Highlights LeadIng Gases and Engineering company Market leader in 4 out 5 Growth Markets Global market leader in Bulk and Cylinder Global leading respiratory healthcare company Superior growth opportunities High share of revenues from and strong investment in Gro
Slide 28: Agenda
Agenda Part 1 Prof. Dr Wolfgang Reitzle 1. Performance 2012 2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends 3. Outlook Part 2 Georg Denoke 1. Operational Performance & Capex 2. Financial Performance & Dividend 3. Summary Appendix 28
Slide 29: Group, solid financial position: Conservative financing strategy
Group, solid financial position Conservative financing strategy Long-dated maturity profile further extended Financial debt, — Two Eurobond issues in 2012 at 1.75% with tenors of 7 and 8 years by instrument — Almost 90% of total financial debt is due beyond 2013 — Approx. 50% of total financial debt
Slide 30: Group, solid financial position: Liquidity position remains strong
Group, solid financial position Liquidity position remains strong € 2.5 bn committed revolving credit facility Central liquidity position — Arranged with 25 national and — Very conservative investment guidelines international banks — Securities at holding level fully invested in AAA — Maturing in 20
Slide 31: Group, pensions
Group, pensions Performance and key figures Net obligation Pension plan assets portfolio structure [€m] 20% 22% DBO Plan Net asset obligation 01/01/2012 5,401 4,842 559 Service costs 96 96 64% 61% Net financing 254 240 14 Actuarial losses/gains 382 83 299 Contributions/payments –253 –93 –160 4% 1% 3
Slide 32: Group, FY 2012 Key P&L items
Group, FY 2012 Key P&L items [€m] 2011 2012 ∆ in % Revenue 13,787 15,280 10.8 Operating profit 3,210 3,530 10.0 Margin 23.3% 23.1% -20 bp EBIT before PPA depreciation (BOC only)* 2,152 2,230 3.6 PPA depreciation (BOC only) -242 -238 1.7 EBIT 1,910 1,992 4.3 Financial result -291 -305 -4.8 Taxes -375
Slide 33: Group, Q4 2012 Key P&L items
Group, Q4 2012 Key P&L items [€m] Q4 2011 Q4 2012 ∆ in % Revenue 3,578 4,217 17.9 Operating profit 847 967 14.2 Margin 23.7% 22.9% -80 bp EBIT before PPA depreciation (BOC only)* 572 582 1.7 PPA depreciation (BOC only) -61 -57 6.6 EBIT 511 525 2.7 Financial result -76 -65 14.5 Taxes -94 -94 - Profit
Slide 34: Gases Division, operating segments Quarterly data
Gases Division, operating segments Quarterly data [€m] EMEA Q1 2011 Q1 2012 Q2 2011 Q2 2012 Q3 2011 Q3 2012 Q4 2011 Q4 2012 Revenue 1,393 1,445 1,431 1,499 1,434 1,528 1,414 1,526 Operating profit* 395 414 412 420 408 431 419 435 Operating margin 28.4% 28.7% 28.8% 28.0% 28.5% 28.2% 29.6% 28.5% Asia/
Slide 35: Group, cash flow statement FY 2012
Group, cash flow statement FY 2012 [€m] Q1 12 Q2 12 Q3 12 Q4 12 2012 2011 Operating profit 808 847 908 967 3,530 3,210 Change in working capital -318 -101 -42 163 -298 -75 Other changes -105 -262 -229 -114 -710 -709 Operating cash flow 385 484 637 1,016 2,522 2,426 Investments in tangibles/intangibl
Slide 36: Gases Division, sales bridge
Gases Division, sales bridge Price/volume increase of 3.8% [€m] +5.7% 12,591 +3.8%* +4.3% +0% 11,061 2011 Currency Natural Gas Price/Volume Lincare 2012 *including € 195 m changes in consolidation 36
Slide 37: Gases Division, split of capex
Gases Division, split of capex High level of investment in future growth Split capex by operating segments [€m] — The overall gases capex is used for the 1,901 +32.1% expansion of Tonnage — EMEA: part of the increase of capex from 1,439 778 2011 to 2012 was used for Healthcare +24.1% — In Asia/Pacif
Slide 38: Gases Division Joint ventures
Gases Division Joint ventures [€m] Proportionate Revenue Share of Net Income (not incl. in the Group top-line) (contribution to Operating Profit) +17.7% +13.5% 526 101 453 89 2011 2012 2011 2012 38
Slide 39: Engineering Division FY 2012 order intake and order backlog
Engineering Division FY 2012 order intake and order backlog By plant type By region Order Intake Order Backlog Order Intake 25.7% 24.8% 28.7% 31.9% EMEA 32.4% 37.7% 21.5% 18.9% 19.1% 20.7% 15.8% 11.4% 28.6% 16.4% 44.1% ASIA/PACIFIC 35.8% 23.4% 26.9% 26.2% 20.4% 13.6% 10.7% 7.3% 8.0% 2011 2012 2011 2
Slide 40: Clean Energy market estimation 2020 & 2030
Clean Energy market estimation 2020 & 2030 top down Market size [€bn] 2020E 2030E Assumptions for 2030 – 250 projects in commercial phase in 2018 – 2030 Clean Coal – 0.5-0.9 Gt at €30-40 per ton CO2 2-3 15 - 35 – Incl. industrial C02 capture & handling of pipeline CO2 & Gas – Commercial demonstratio
Slide 41: Group BOC PPA – Expected depreciation & amortisation
Group BOC PPA – Expected depreciation & amortisation — Development of depreciation and amortisation — Impact in 2012: € 238 million — Expected range adjusted due to exchange rate effects Expected range [€m] BOC PPA depreciation planning [€m] 2013 215 – 225 400 2014 200 – 220 … 300 2022 < 125 200 100
Slide 42: Group, definition of financial key figures
Group, definition of financial key figures Operating Return EBITDA (incl. IFRIC 4 adjustment) excl. special items Profit incl. share of net income from associates and joint ventures adjusted Return Operating profit - depreciation / amortisation ROCE excl. depreciation/amortization from purchase pric
Slide 43: Investor Relations Contact
Investor Relations Contact Phone: +49 89 357 57 1321 Email: [email protected] Internet: www.linde.com Financial calendar — Q1 report 2013: 06 May 2013 — Annual General Meeting: 29 May 2013 — 6M report 2013: 30 July 2013 — 9M report 2013: 29 October 2013 43