Skip to main content

The Linde Group release 9M financial review

Published by
World Fertilizer,


The Linde Group, a leading producer of industrial gases, states that 2018 revenue and earnings is expected to be at the top end of their projected ranges.

The merger between Linde AG and Praxair was successfully completed at the end of October following the antitrust clearance received from the FTC. The exchange offer of Linde plc to Linde AG shareholders was settled at 31 October 2018. 92% of the shares have been submitted for exchange. The shares of the new group are listed on both the Frankfurt and New York stock exchanges.

However, the business review set out below for the period January to September 2018 relates solely to The Linde Group on a stand-alone basis.

Group revenue in the nine months to 30 September 2018 fell by 1.7% to €13.050 billion (2017: €13.281 billion). This was due mainly to exchange rate effects. The first-time application of IFRS 15 also had a negative impact on revenue. After adjusting for exchange rate effects arising solely from translation and for the impact of the first-time application of IFRS 15, Group revenue was 4.8% higher than in the first nine months of 2017.

Group operating profit rose by 4.2% to €3.301 billion (2017: €3.169 billion). After adjusting for exchange rate effects, the increase was even greater at 9%. At 25.3%, the Group operating margin was significantly higher than the figure for the first nine months of 2017 of 23.9%. 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.

In the Gases Division, Linde generated revenue in the first nine months of 2018 of €10.908 billion, which was 3% below the figure for the prior-year period of €11.244 billion. After adjusting for exchange rate effects and for the impact of the first-time application of IFRS 15, revenue in the Gases Division increased by 4.5%. On a comparable basis (after also adjusting for changes in the price of natural gas), revenue growth was 4.2%. Operating profit was €3.260 billion, which was 1.7% higher than the figure for the first nine months of 2017 of €3.207 billion. After adjusting for exchange rate effects, operating profit increased by 6.5%. At 29.9%, the operating margin was well above the figure for the prior-year period of 28.5%.

In the EMEA segment, Linde’s largest sales market, the Group generated revenue in the first nine months of 2018 of €4.410 billion, which was 0.5% higher than the figure achieved in the first nine months of 2017 of €4.386 billion. On a comparable basis, revenue rose by 3.9%. Operating profit was €1.393 billion, an increase of 0.7% when compared with the figure for the first nine months of 2017 of €1.383 billion. After adjusting for exchange rate effects, the increase was 2.7%. At 31.6%, the operating margin was similar to the figure for the prior-year period of 31.5%. The first-time application of IFRS 15 and efficiency improvement measures had a positive impact on the margin. A gain on deconsolidation of around €40 million recognised in the 1Q18 on the sale of its subsidiary Tega – Technische Gase und Gasetechnik GmbH also had a positive impact on the margin. Factors which had a negative impact on the margin were different trends in specific product areas in the various EMEA regions and higher energy and natural gas prices.

In the Asia Pacific segment, Linde generated revenue in the nine months to 30 September 2018 of €3.212 billion, which was 1.9% below the figure for the first nine months of 2017 of €3.273 billion. On a comparable basis, revenue increased by 5.1%. At €930 million, operating profit was 1.8% above the figure for the prior-year period of €914 million. After adjusting for exchange rate effects, the growth in operating profit achieved by Linde was 7.4%. It should be noted here that in 2017 there was a one-off effect from the sale of assets of €70 million. The operating margin rose to 29% (2017: 27.9%).

In the Americas segment, revenue in the first nine months of 2018 fell by 7.6% to €3.437 billion (2017: €3.719 billion). On a comparable basis, revenue rose by 4.4%. When compared with the prior-year period, operating profit improved by 3% to €937 million (2017: €910 million). After adjusting for exchange rate effects, Linde achieved a substantial increase in operating profit of 11.5%. There was a substantial rise in the operating margin to 27.3% (2017: 24.5%). 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.

 

 

Read the article online at: https://www.worldfertilizer.com/special-reports/15112018/the-linde-group-release-9m-financial-review/

 

Embed article link: (copy the HTML code below):