DGAP-News: Linde plc
/ Key word(s): Quarter Results
Linde Reports First-Quarter 2022 Results
Woking, UK, April 28, 2022 - Linde plc (NYSE: LIN; FWB: LIN) today reported first-quarter 2022 income from continuing operations of $1,174 million and diluted earnings per share of $2.30, up 20% and 24% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,500 million, up 14% versus prior year. Adjusted earnings per share was $2.93, 18% above prior year and 6% higher sequentially.
Linde's sales for the first quarter were $8,211 million, 13% above prior year. Compared to prior year, underlying sales increased 9%, including 6% price attainment and 3% higher volumes, mostly from the manufacturing, chemicals and energy end markets. Sequentially, underlying sales grew 2% driven by 3% higher pricing partially offset by seasonally lower volumes.
First-quarter operating profit was $1,480 million. Adjusted operating profit of $1,905 million was up 13% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Excluding the effects of cost pass-through, adjusted operating margins expanded 130 basis points versus prior year.
First-quarter operating cash flow of $2,000 million more than covered capital expenditures of $649 million resulting in free cash flow of $1,351 million. During the quarter, the company returned $2,301 million to shareholders through dividends and stock repurchases, net of issuances.
Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, "Linde employees delivered another strong quarter of quality financial results with ROC reaching a new record of 18.9% and operating margins expanding 130 basis points excluding cost-pass through. In addition, EPS grew 18% to an all-time high of $2.93. The business model continues to deliver in any environment, demonstrating resiliency during economic downturns and significant growth during the recovery."
Lamba continued, "Looking ahead, the geopolitical and macro environment has become more uncertain, but I have confidence the company will continue to deliver on commitments to shareholders."
For the second quarter of 2022, Linde expects adjusted diluted earnings per share in the range of $2.90 to $3.00, up 7% to 11% versus prior-year quarter. This guidance assumes flat currency sequentially and a headwind of 3% year-over-year.
For the full year 2022, the company expects adjusted diluted earnings per share to be in the range of $11.65 to $11.90, up 9% to 11% versus prior year or 11% to 13% excluding currency headwind. This guidance range excludes contribution from Russian earnings by the second half of 2022 as the company continues to scale back Russian operations and wind down engineering projects affected by sanctions. Full-year capital expenditures are expected to be in the range of $3.0 billion to $3.4 billion to support maintenance and growth requirements including the $3.5 billion contractual sale of gas project backlog.
APAC (Asia Pacific) sales of $1,602 million were 12% above prior year and up 1% sequentially. Compared to prior year, underlying sales grew 10% driven by 4% price attainment and 6% volume growth, primarily in the electronics, chemicals and energy end markets plus project start-ups. Sequentially, higher pricing of 1% was offset by seasonally lower volumes. Operating profit of $399 million was 24.9% of sales, 50 basis points above prior year or 140 basis points higher when excluding the effects of cost pass-through.
EMEA (Europe, Middle East & Africa) sales of $2,148 million were up 19% versus prior year and grew 4% sequentially. Compared with first-quarter 2021, underlying sales grew 11%, led by higher pricing. Sequentially, underlying sales grew 2% with 5% pricing, partially offset by lower volumes. Operating profit of $503 million was 23.4% of sales, 170 basis points below prior year or 170 basis points higher when excluding the effects of cost pass-through.
Linde Engineering sales were $728 million, 8% above prior year, and operating profit was $143 million or 19.6% of sales. Order intake for the quarter was $645 million and third-party sale of equipment backlog was $2.2 billion.
Materials to be used in the teleconference are also available on the website.
For more information about the company and its products and services, please visit www.linde.com
Adjusted amounts, free cash flow and return on capital are non-GAAP measures. See the attachments (Earnings release tables: https://eqs-cockpit.com/cgi-bin/fncls.ssp?u=38a1361f007623f7591dd86d3e7bfa00) for a summary of non-GAAP reconciliations and calculations for adjusted amounts.
Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.
*Note: We are providing adjusted earnings per share ("EPS") guidance for 2022. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, any impairment or other charges related to scaling back operations in Russia as actions are defined and executed and as sanctions are enacted that impact the Company's operations, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.
Conflict between Russia and Ukraine
In 2021, Linde's industrial gas business generated approximately 1% of consolidated Linde sales from Russia. Total assets in Russia represent approximately 1% of consolidated Linde assets. Sales and total assets in Ukraine are immaterial. As of March 31, 2022, Linde has approximately $2 billion recorded in contract liabilities within the condensed consolidated balance sheet related to engineering projects in Russia.
Linde continues to closely monitor the situation in Ukraine and has taken steps to ensure the safety of its employees and the continuous delivery of critical medical oxygen. Linde is working with the relevant governments and authorities to ensure the company fully complies with international sanctions and is safely winding down affected projects in Russia. During the first quarter of 2022, engineering projects being executed for Russia that are currently or expected to be impacted by sanctions and thus being wound down were approximately $0.35 billion of sales. Linde has suspended all business development for new projects and is scaling back its operations in Russia by ceasing to supply certain customers and starting the process to divest industrial assets to reduce its footprint in the country.
It is possible that Linde may incur impairment and other charges in future quarters as these actions are defined and executed and as further sanctions are enacted that impact the Company's operations in Russia, including industrial gases and engineering. Any charges related to such impairments or obligation to satisfy any residual contract liabilities may have an adverse effect on Linde's result of operations or cash flows.
Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A. Risk Factors in Linde plc's Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 28, 2022 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.
File: Q1 22 Earnings Tables
28.04.2022 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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|GU21 6HT Woking, Surrey|
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|EQS News ID:||1337853|
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