Financial Data and Key Metrics Changes - Earnings per share (EPS) increased by 8% excluding foreign exchange effects, with a reported EPS of $3.95, which is a 5% increase year-over-year [6][21] - Operating margins expanded by 120 basis points to 30.1%, driven by management actions and pricing strategies [6][21] - Return on Capital Employed (ROCE) remained strong at 25.7% [6] Business Line Data and Key Metrics Changes - Sales for the first quarter were $8.1 billion, flat compared to the prior year and down 2% sequentially [19] - Underlying sales increased by 1% year-over-year, with higher pricing offset by lower volumes [19][20] - The Americas segment saw a 3% price increase, reflecting inflationary pressures, while packaged gases experienced some weakness [15][19] Market Data and Key Metrics Changes - In the APAC region, China showed strength in battery and electronics, but rare gases and helium prices were lower than the previous year [12] - EMEA did not see meaningful improvement in industrial activity, despite government spending [13] - The Americas experienced mixed results, with Canada and U.S. packaged gases facing manufacturing uncertainty, while bulk volumes continued to grow [15] Company Strategy and Development Direction - The company maintains a defensive operating model, focusing on resilient end markets such as healthcare, electronics, and food and beverage [9][11] - Linde is positioned to capitalize on decarbonization discussions and potential infrastructure spending [14] - The company anticipates continued project wins and backlog growth, with a strong focus on capital allocation and management actions to drive EPS growth [16][27] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the economic environment, expecting volatility in end market trends [17] - The company remains confident in navigating uncertainty and leveraging its operating model for high-quality growth [17][27] - Future guidance reflects a cautious outlook, with EPS expected to grow 3% to 5% in the second quarter, assuming recessionary conditions [25][26] Other Important Information - The company reported a strong backlog of $10 billion, with over $7 billion related to gas projects under long-term contracts [16][22] - Capital expenditures for the quarter were $1.3 billion, with a significant portion allocated to project backlog [22][24] - The company raised its annual dividend by 8%, marking 32 consecutive years of dividend growth [24] Q&A Session Summary Question: Impact of Dow's Alberta project delay on Linde - Management confirmed that contractual protections are in place for delays, and they will work with Dow to explore alternatives [31][32] Question: EMEA margin performance and future expectations - Management indicated that EMEA margins are a result of consistent management actions and expect margins to grow as volumes improve [35][37] Question: Clean energy market opportunities - Management remains confident in the $8 billion to $10 billion clean energy project pipeline over the next few years, focusing on low carbon hydrogen projects [40][43] Question: Guidance on FX impact and manufacturing demand - Management noted that the majority of FX impact was in the Americas, with manufacturing demand showing weakness in sectors like automotive and agriculture [51][57] Question: Electronics backlog and EMEA margins - Management stated that EMEA margins have improved due to effective execution of their business model, and they expect to start up $1 billion from the backlog this year [64][68] Question: Risks around backlog and project commitments - Management expressed confidence in the backlog and highlighted growth opportunities in resilient end markets, particularly in electronics and India [73][78]

Core Viewpoint - Linde reported quarterly earnings of $3.95 per share, exceeding the Zacks Consensus Estimate of $3.93 per share, and showing an increase from $3.75 per share a year ago, indicating a positive earnings surprise of 0.51% [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates for the last four quarters [2] - Linde's revenues for the quarter ended March 2025 were $8.11 billion, which missed the Zacks Consensus Estimate by 1.77%, and remained relatively flat compared to year-ago revenues of $8.1 billion [2] - The company has not beaten consensus revenue estimates over the last four quarters [2] Group 2: Stock Performance and Outlook - Linde shares have increased approximately 8.3% since the beginning of the year, contrasting with the S&P 500's decline of -5.3% [3] - The future performance of Linde's stock will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $4.14 on revenues of $8.39 billion, and for the current fiscal year, it is $16.43 on revenues of $33.91 billion [7] Group 3: Industry Context - The Chemical - Specialty industry, to which Linde belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5][6]

EX-99.1 2 lin_ex991.htm PRESS RELEASE Linde Reports First-Quarter 2025 Results First-Quarter Highlights Woking, UK, May 1, 2025 – Linde plc (Nasdaq: LIN) today reported first-quarter 2025 net income of $1,673 million and diluted earnings per share of $3.51, up 3% and 5% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted net income was $1,880 million, up 3% versus prior year. Adjusted earnings per share was $3.95, 5% above prior year. Linde's sales for the first quarter ...

First Quarter 2025 Financial Performance - Sales for Q1 2025 were $8112 million, a 0% change compared to Q1 2024[8] - Operating profit for Q1 2025 was $2438 million, a 4% increase compared to Q1 2024[8] - Diluted EPS for Q1 2025 was $395, a 5% increase compared to Q1 2024[8] - The company's ROC was 257%, a 10 bps increase year-over-year[8] - Operating cash flow was $2161 million, an 11% increase year-over-year[8] - Base capex was $636 million, a 2% decrease year-over-year[8] - Project capex was $634 million, a 58% increase year-over-year[8] 2025 Guidance - The company expects adjusted EPS to be in the range of $395 to $405 for the second quarter of 2025, representing a 3% to 5% increase versus 2024[18] - The company expects adjusted EPS to be in the range of $1620 to $1650 for the full year 2025, representing a 4% to 6% increase versus 2024[18] - The company anticipates a currency headwind of -2% for both the second quarter and full year 2025[18] - The company projects capital expenditures between $50 billion and $55 billion for the full year[18] Capital Allocation - The company secured growth investments of $07 billion[13] - The company returned $18 billion to shareholders through dividends ($07 billion) and net share buybacks ($11 billion)[13] - The company invested $13 billion in business investments[13]

Core Viewpoint - Linde plc is expected to report its first-quarter 2025 results on May 1, with positive indicators from previous quarters suggesting a potential earnings beat due to strong performance in the Americas segment and favorable pricing dynamics [1][7]. Group 1: Previous Quarter Performance - In the last reported quarter, Linde's earnings were $3.97 per share, surpassing the Zacks Consensus Estimate of $3.93, driven by higher pricing and increased volumes from the Americas segment [2]. - Linde has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 1.45% [2]. Group 2: Earnings Estimates - The Zacks Consensus Estimate for first-quarter earnings per share is $3.93, reflecting a 4.8% improvement from the prior-year quarter [3]. - The revenue estimate for the first quarter is $8.26 billion, indicating a year-over-year increase of 1.96% [3]. Group 3: Contributing Factors - Linde's position as a global leader in industrial gases, including oxygen, hydrogen, and nitrogen, supports its performance across various end markets such as healthcare and manufacturing [4]. - The Americas segment is expected to contribute significantly to profits, with operating profit estimated at $1.16 billion, up from $1.12 billion in the first quarter of 2024 [6]. - The Engineering business unit's operating profit is estimated at $96 million, an increase from $93 million a year ago, indicating overall positive demand and pricing dynamics [6]. Group 4: Earnings Prediction - The company's Earnings ESP is +0.30%, suggesting a strong likelihood of an earnings beat, supported by a Zacks Rank of 3 [7].

Wall Street analysts forecast that Linde (LIN) will report quarterly earnings of $3.93 per share in its upcoming release, pointing to a year-over-year increase of 4.8%. It is anticipated that revenues will amount to $8.26 billion, exhibiting an increase of 2% compared to the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.1% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimate ...

Core Insights - The article discusses the perspective of Joseph Jones, a professor with over fifteen years of market study experience, focusing on portfolio construction from a dividend growth investor's viewpoint [1]. Group 1 - Joseph Jones emphasizes the importance of dividend growth in portfolio construction, which is a key strategy for long-term investors [1].

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Collaboration with Linde - O-I Glass, Inc. has partnered with Linde plc to implement the OPTIMELTTM Thermochemical Regenerator technology at its Holzminden plant in Germany, aimed at enhancing efficiency and reducing emissions [1][2] - The OPTIMELTTM TCR technology can reduce fuel consumption in the melting process by approximately 30% and is adaptable to various fuels, including low-carbon hydrogen [2][5] - Linde will also install a Centrifugal VITRON Vacuum Pressure Swing Adsorption plant to produce oxygen for the furnace, improving power efficiency and lowering the environmental footprint [4][5] Financial Performance - O-I Glass reported a fourth-quarter 2024 adjusted loss per share of 5 cents, which was better than the Zacks Consensus Estimate of a loss of 11 cents, but down from earnings of 12 cents in the same quarter last year [6] - Revenues for the quarter were $1.53 billion, a decrease of 6.8% year-over-year, missing the Zacks Consensus Estimate of $1.61 billion, with flat sales volume in tons [7] Stock Performance - O-I Glass shares have declined by 23.6% over the past year, compared to a 21.8% decline in the industry [8]

Financial Performance - Linde's sales for 2024 were $33,005 million, a slight decrease from $33,364 million in 2022, indicating a year-over-year decline of approximately 1.1%[16]. - Sales for 2024 were $33,005 million, flat compared to 2023, with a 2% increase from higher pricing in the Americas and EMEA segments[124]. - Reported operating profit increased by 8% to $8,635 million, driven by higher pricing and productivity savings[124]. - Net income for Linde plc rose to $6,565 million, a 6% increase from $6,199 million in 2023[124]. - Adjusted net income was $7,475 million, reflecting a 7% increase from $6,989 million in 2023[127]. - Cash flow from operations was $9,423 million, up $118 million from 2023, influenced by higher net income[124]. - Cost of sales decreased by 2% to $17,143 million, representing 51.9% of sales, down from 53.2% in 2023[127]. - Selling, general and administrative expenses increased by 1% to $3,337 million, accounting for 10.1% of sales[132]. - Reported interest expense rose by 28% to $256 million due to higher borrowings and interest rates[141]. - The effective tax rate for 2024 was 23.4%, up from 22.7% in 2023, primarily due to prior year benefits[143]. - Reported diluted earnings per share increased by $1.03, or 8%, in 2024 compared to 2023, with adjusted diluted EPS at $15.51, up $1.31[147]. - EBITDA rose to $12,585 million in 2024 from $12,007 million in 2023, while adjusted EBITDA increased to $12,819 million from $12,133 million[149]. Operational Highlights - Approximately 65% of Linde's 2024 sales were generated outside the United States, highlighting the company's significant international presence[28]. - Linde's Engineering business focuses on sustainable technologies, helping customers avoid and utilize carbon dioxide emissions, thus supporting the transition to clean energy[25]. - The company has a diverse customer base across various industries, including healthcare, chemicals, energy, and manufacturing, reducing dependency on any single customer[27]. - Linde's research and development efforts are directed towards gas processing, separation technologies, and clean energy, with facilities located in Germany, New York, Illinois, and China[30]. - The company operates in a highly competitive market, facing pressure from both global and regional players, which necessitates continuous innovation and efficiency improvements[36]. - Linde's international operations are subject to risks including currency exchange rate fluctuations, which could adversely affect financial results[59]. - The company serves a diverse group of industries across more than 80 countries, which generally leads to financial stability through various business cycles[54]. Workforce and Employment - As of December 31, 2024, Linde employed 65,289 individuals globally, with a workforce composition of approximately 28% women and 72% men[42]. - The number of employees decreased by 2%, or 1,034 employees, to 65,289 as of December 31, 2024, primarily due to cost reduction programs and a divestiture in APAC[148]. - Linde's ability to attract and retain qualified personnel is critical for successful business management and product development[63]. Capital and Investments - Capital expenditures totaled $4,497 million, with dividends paid amounting to $2,655 million[124]. - Acquisitions in 2024 were $317 million, a decrease of $636 million from 2023, primarily related to packaged gas businesses in the Americas[203]. - Linde's backlog of large projects under construction was approximately $7.1 billion at the end of 2024[202]. - Cash and cash equivalents at the end of the period were $4,850 million, an increase of $186 million from 2023[199]. - Cash used for financing activities decreased to $4,359 million in 2024 from $5,400 million in 2023[206]. - Total net debt outstanding rose to $16,773 million at December 31, 2024, an increase of $2,064 million from $14,709 million at December 31, 2023[209]. Risk Management - Linde is exposed to legal risks related to product liability, particularly in the U.S., where class action risks are historically significant[80]. - Changes in tax laws could adversely affect Linde's financial position, especially as it is currently treated as a U.K. tax resident[87]. - Cybersecurity is identified as a top enterprise risk, with Linde implementing advanced security technologies and mandatory training for employees[91]. - Linde's compliance with international laws and regulations is critical, as failure to do so may result in significant penalties and reputational damage[77]. - Catastrophic events such as natural disasters or pandemics could disrupt operations and significantly affect financial results[62]. - Macroeconomic factors may increase the cost of obtaining financing, adversely impacting financial results[60]. Shareholder Returns - Linde's share repurchase program approved on October 23, 2023, allows for the repurchase of up to $15 billion of ordinary shares, with $3.1 billion already repurchased by December 31, 2024[107]. - As of December 31, 2024, Linde has $11.9 billion remaining authorized for share repurchases under the 2023 program[108]. - Linde's ordinary shares have shown a cumulative return of 211% from December 31, 2019, to December 31, 2024, compared to 197% for the S&P 500 Index and 152% for the S5 Materials Index[109]. - Cash dividends increased to $2,655 million in 2024, reflecting a 9% increase in dividends per share to $5.56 from $5.10[208]. - Net purchases of ordinary shares were $4,451 million in 2024, up from $3,925 million in 2023[207].