LINDE PLC 
DGAP-News: Linde AG / Key word(s): Interim Report January to June 2018: Linde business performs well in the first half-year - significant increase in Group earnings - Group revenue: EUR 8.640 bn (up 4.7 percent after adjusting for exchange rate effects and the impact of the first-time application of IFRS 15) - Group operating profit[1]: EUR 2.210 bn (up 10.1 percent after adjusting for exchange rate effects) - Earnings per share adjusted for special items: EUR 4.66 (2017: EUR 3.83) - Group outlook for 2018 confirmed - Completion of merger with Praxair remains planned for the second half of 2018
Munich, 25 July 2018 - The business of technology company The Linde Group performed well in the first half of 2018. After adjusting for exchange rate effects and for the first-time application of new accounting standard IFRS 15, revenue rose by 4.7 percent compared with the first half of 2017. Group operating profit increased by 10.1 percent after adjusting for exchange rate effects. At 25.6 percent, the Group operating margin was also significantly higher than the figure for the first half of 2017 of 23.9 percent.
"Linde is on the right track. We are seeing encouraging growth in revenue and were able once again to achieve a significant increase in our Group margin," said Professor Dr Aldo Belloni, Chief Executive Officer of Linde AG. "We are working consequently to ensure that the efficiency improvement measures we introduced are being successfully implemented and that we continue to optimise our portfolio." Group operating profit rose by 3.5 percent to EUR 2.210 bn (2017: EUR 2.136 bn). After adjusting for exchange rate effects, the increase was even 10.1 percent. At 25.6 percent, the Group operating margin was significantly higher than the figure for the first half of 2017 of 23.9 percent. Factors contributing to this improvement included not only the measures introduced as part of the Group-wide efficiency programme LIFT, portfolio optimisation and good macroeconomic conditions, but also the impact of the first-time application of IFRS 15.
Linde generated earnings per share in the first six months of 2018 of EUR 4.37 (2017: EUR 3.19). Earnings per share adjusted for special items increased to EUR 4.66 (2017: EUR 3.83). Operating cash flow was EUR 1.275 bn, slightly below the figure for the first half of 2017 of EUR 1.324 bn. It should be noted here that payments of around EUR 180 m were made in the reporting period for restructuring costs and costs related to the proposed merger with Praxair (2017: around EUR 90 m). In the EMEA segment, Linde's largest sales market, the Group generated revenue in the first six months of 2018 of EUR 2.957 bn, which was 0.3 percent higher than the figure achieved in the first half of 2017 of EUR 2.947 bn. On a comparable basis, revenue rose by 4.2 percent. Operating profit was EUR 968 m, an increase of 4.8 percent when compared with the figure for the first half of 2017 of EUR 924 m. After adjusting for exchange rate effects, the increase was 7.2 percent. The operating margin rose to 32.7 percent (2017: 31.4 percent). Efficiency improvement measures also contributed towards this increase. Moreover, in the first quarter of 2018, Linde recognised a gain on deconsolidation of around EUR 40 m on the sale of its subsidiary Tega - Technische Gase und Gasetechnik GmbH. Positive trends were to be seen in the EMEA segment in all product areas. In the liquefied gases and cylinder gas product areas in particular, revenue increased in virtually all regions. In the on-site business, there were volume reductions resulting from the sale of parts of a production facility. In the Asia/Pacific segment, Linde generated revenue in the six months to 30 June 2018 of EUR 2.082 bn, which was 4.1 percent below the figure for the first half of 2017 of EUR 2.172 bn. On a comparable basis, revenue increased by 4.3 percent. At EUR 600 m, operating profit was 2.4 percent below the figure for the prior-year period of EUR 615 m. After adjusting for exchange rate effects, the increase in operating profit achieved by Linde was 4.9 percent. It should be noted here that in 2017 there was a one-off effect from the sale of assets of EUR 70 m. The operating margin rose to 28.8 percent (2017: 28.3 percent). In the Asia/Pacific segment as well, positive trends were to be seen in particular in the on-site and liquefied gases business. One of the factors contributing to this growth was the start-up of multiple air separation plants in China. In the South Pacific, the prevailing weak economic environment in manufacturing and declining investment in the mining industry had an adverse impact on revenue growth. However, the measures introduced as part of the LIFT efficiency programme had a positive impact on the earnings trend. In the Americas segment, revenue fell by 11.8 percent in the first half of 2018 to EUR 2.244 bn (2017: EUR 2.545 bn). On a comparable basis, revenue rose by 3.1 percent. When compared with the prior-year period, operating profit decreased by 1.8 percent to EUR 616 m (2017: EUR 627 m). After adjusting for exchange rate effects, Linde achieved a significant increase in operating profit of 10.6 percent. There was a substantial increase in the operating margin to 27.5 percent (2017: 24.6 percent). It should be noted that factors which had a positive impact on the margin included not only the first-time application of IFRS 15, but also the measures introduced as part of the Group-wide efficiency programme LIFT, as well as one-off effects. There were positive trends in the liquefied gases and cylinder gas business in North America. Revenue in the Healthcare business in North America also remained stable. However, opposing trends were to be seen here. Although the business achieved volume increases, price reductions imposed by private health insurers continued to have a negative impact. In the on-site business, the stoppage of a plant in the first quarter led to a decline in revenue. Engineering Division: Increase in operating profit, higher order intake The market for international large-scale plant construction remains volatile and subject to intense competition. Nevertheless, the Engineering Division was able to increase its order intake by 60.5 percent to EUR 1.878 bn (2017: EUR 1.170 bn). The order backlog increased to EUR 4.676 bn (31 December 2017: EUR 4.178 bn). Outlook confirmed[3] Proposed merger with Praxair, Inc.
To coincide with the publication of the interim report, a webcast for analysts will take place today at 2 p.m. German time in English with Dr Sven Schneider, CFO of Linde AG. Journalists will have the opportunity to watch the webcast by following this link:
For more information, see The Linde Group online at www.linde.com Further information:
Forward-looking Statements This communication includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions on the basis of factors currently known to us. 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. These forward-looking statements include, but are not limited to, statements regarding benefits of the proposed business combination, integration plans and expected synergies, and anticipated future growth, financial and operating performance and results. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted or expected. No assurance can be given that these forward-looking statements will prove accurate and correct, or that projected or anticipated future results will be achieved. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: the expected timing and likelihood of the completion of the contemplated business combination, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the contemplated business combination that could reduce anticipated benefits or cause the parties to abandon the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the business combination agreement; the ability to successfully complete the proposed business combination and the exchange offer; regulatory or other limitations imposed as a result of the proposed business combination; the success of the business following the proposed business combination; the ability to successfully integrate the Praxair and Linde businesses; risks related to disruption of management time from ongoing business operations due to the proposed business combination; the risk that the announcement or consummation of the proposed business combination could have adverse effects on the market price of Linde's or Praxair's common stock or the ability of Linde and Praxair to retain customers, retain or hire key personnel, maintain relationships with their respective suppliers and customers, and on their operating results and businesses generally; the risk that Linde plc may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; state, provincial, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the industrial gas, engineering and healthcare industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for industrial gas, engineering and healthcare and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the debt and capital markets; market acceptance of and continued demand for Linde's and Praxair's products and services; changes in tax laws, regulations or interpretations that could increase Praxair's, Linde's or Linde plc's consolidated tax liabilities; and such other factors as are set forth in Linde's annual and interim financial reports made publicly available and Praxair's and Linde plc's public filings made with the SEC from time to time, including but not limited to those described under the headings "Risk Factors" and "Forward-Looking Statements" in Praxair's Form 10-K for the fiscal year ended December 31, 2017, which are available via the SEC's Web site at www.sec.gov. The foregoing list of risk factors is not exhaustive. These risks, as well as other risks associated with the contemplated business combination, are more fully discussed in the proxy statement/prospectus and the offering prospectus included in the Registration Statement on Form S-4 filed by Linde plc with the SEC and in the offering document and/or any prospectuses or supplements filed with BaFin in connection with the contemplated business combination. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Linde, Praxair or Linde plc has described. All such factors are difficult to predict and beyond our control. All forward-looking statements included in this document are based upon information available to Linde, Praxair and Linde plc on the date hereof, and each of Linde, Praxair and Linde plc disclaims and does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
25.07.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. |
| Language: | English |
| Company: | Linde AG |
| Klosterhofstraße 1 | |
| 80331 München | |
| Germany | |
| Phone: | +49.89.35757-01 |
| Fax: | +49.89.35757-1075 |
| E-mail: | matthias.dachwald@linde.com |
| Internet: | www.linde.de |
| ISIN: | DE0006483001, DE000A2E4L75 |
| WKN: | 648300, A2E4L7 |
| Indices: | DAX |
| Listed: | Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Munich, Stuttgart; Regulated Unofficial Market in Hanover, Tradegate Exchange; SIX |
| End of News | DGAP News Service |
707549 25.07.2018
