Linde plc(US:LIN)2025-05-01 13:00Financial 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]