Linde plc(LIN)2025-02-06 17:32Financial Data and Key Metrics Changes - Linde reported fourth quarter sales of 2.5 billion, resulting in a margin of 29.9%, driven by management actions around price, cost, and productivity [33] - EPS grew by 11% to 200 million [19] Market Data and Key Metrics Changes - The company anticipates low to mid-single-digit growth in resilient end markets, particularly driven by electronics and food and beverage sectors [68] - In the Americas, low single-digit growth is expected, while EMEA is projected to experience continued softening, particularly in Western Europe [71][72] - In Asia Pacific, particularly China, Linde does not expect significant improvements in 2025, with industrial volumes remaining stable but flat [74][80] Company Strategy and Development Direction - Linde emphasizes the importance of maintaining a disciplined capital allocation policy and focusing on core business areas to ensure long-term growth [15][21] - The company aims to achieve a 10% EPS growth annually through a combination of capital allocation and management actions, despite macroeconomic challenges [24][25] - Linde is committed to sustainability, with a goal to reduce greenhouse gas emissions by 35% by 2035 and has increased its low carbon and renewable energy consumption by 19% year-over-year [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted that discussions with potential project partners have slowed down slightly due to increased rigor before final investment decisions (FID) [44] - The company remains confident in its ability to navigate macroeconomic challenges and create shareholder value through disciplined execution and capital allocation [29][41] - Management expects margin expansion across all segments in 2025, with a range of 20 to 50 basis points [55] Other Important Information - Linde's backlog at year-end exceeded 7 billion [16] - The company returned 7 billion to shareholders through dividends and stock repurchases, highlighting a strong commitment to shareholder returns [36] Q&A Session Summary Question: How have discussions with potential project partners evolved? - Management noted that discussions have slowed down slightly as partners are applying more rigor before reaching FID, which is seen as a positive development [44] Question: Will Americas margins gain ground in 2025? - Management expects margin expansion in both Americas and APAC, with no impediments to achieving higher margins across segments [55] Question: What is the leverage of industrial production (IP) on EPS? - Management indicated that base volumes are closely aligned with IP, with higher leverage seen in developing countries [62] Question: What are the concerns regarding market share? - Management emphasized that Linde is winning more than its fair share of large projects, with a focus on network density rather than traditional market share metrics [102][104] Question: What is the outlook for the healthcare segment? - Management expects long-term mid-single-digit growth in healthcare, with current numbers reflecting portfolio rationalization efforts [90] Question: How does the backlog break down between sale of gas and equipment? - Approximately 3.1 billion of the backlog is in the sale of equipment, with the remainder in the sale of gas, and management has protections in place against tariffs [126][128]