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The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
The Linde Group Presentation Financial Year 2011
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The Linde Group Presentation Financial Year 2011

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  • 1. Full year results 2011.Profitable Growth.Analysts´ Conference Call09 March 2012
  • 2. DisclaimerThis presentation contains forward-looking statements about Linde AG (“Linde”) and their respectivesubsidiaries and businesses. These include, without limitation, those concerning the strategy of an integratedgroup, future growth potential of markets and products, profitability in specific areas, the future productportfolio, anti-trust risks, development of and competition in economies and markets of the group.These forward looking statements involve known and unknown risks, uncertainties and other factors, many ofwhich are outside of Linde’s control, are difficult to predict and may cause actual results to differ significantlyfrom any future results expressed or implied in the forward-looking statements in this presentation.While Linde believes that the assumptions made and the expectations reflected in this presentation arereasonable, no assurance can be given that such assumptions or expectations will prove to have been correctand no guarantee of whatsoever nature is assumed in this respect. The uncertainties include, inter alia, the riskof a change in general economic conditions and government and regulatory actions. These known, unknown anduncertain factors are not exhaustive, and other factors, whether known, unknown or unpredictable, could causethe group’s actual results or ratings to differ materially from those assumed hereinafter. Linde undertakes noobligation to update or revise the forward-looking statements in this presentation whether as a result of newinformation, future events or otherwise. 2
  • 3. AgendaPart 1 Prof. Dr Wolfgang Reitzle1. 2011 Highlights and Divisional Performance2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends3. 2012 OutlookPart 2 Georg Denoke1. Operational Performance2. Project Pipeline and Capex3. Financial PerformanceAppendix 3
  • 4. Highlights 2011Profitable Growth.Group sales and profit again on record levelsGroup sales increased by 7.1% and the operating profit grew at a faster pace by 9.7%Group operating margin has further improved by 60 bp to 23.3%Gases operating margin increased by 50 bp to 27.5%Adjusted* EPS increased by 11.9% to € 7.71Adjusted* ROCE is up by 50 bp to 13.0%Net debt down by € 403 m to € 5.094 bnResilient business model and implementation of HPO initiatives drive profitable growthSolid contribution from Mature Markets and further increased share from Growth MarketsImprovement of Gases operating margin in all operating segments supported by HPOOutlookMid-term targets for 2014 confirmed*please see definitions on page 53 4
  • 5. Group, sales by Divisions Continued growth in all areasin € million,as reported 13,787 Group 12,868 +7.1% Gases Division — Growth track continued in 2011 in all regions led by Asia/Pacific — Growth in all product areas led by Tonnage and Bulk +8.1% 11,061 Gases 10,228 Engineering Division — Order intake well balanced between Growth Markets and Mature Markets — Order backlog remains on solid level Engineering 2,461 +2.8% 2,531 Other/ 179 195 Cons. 2010 2011 5
  • 6. Group, operating profit by Divisions Profitable Growth. - Group margin further improvedin € million,as reported 3,210 2,925 +9.7% Group Gases Division — Growth of operating profit* continued — Operating margin further improved by 50 bp to 27.5% +9.9% 3,041 Engineering Division 2,766 Gases — Operating margin of 12.0% on exceptional high level ahead of mid-term target of 8% — Margin development driven by successful execution of individual projects Engineering 271 +12.2% 304 Other/Cons. -112 -135 2010 2011 Op. margin 22.7% 23.3% 60 bp on reported basis *EBITDA incl. share of net income from associates and joint ventures 6
  • 7. Gases Division, sales by product areasBalanced mix as basis for profitable growthin € million, comparable* (consolidated) +7.4% 11,061 Solid growth in Healthcare 10,296* 1,189 — The Mega-trend growth opportunities continueHealthcare 1,132 +5.0% — Acquisition will strengthen Homecare portfolio 2,695 Continuous growth in Tonnage again above Tonnage 2,484 +8.5% previous record level — Increased contribution from Growth Markets in 2011 2,683 — Numerous important take-or-pay contract wins in Growth Bulk 2,472 +8.5% Markets — Continuous contribution from project ramp-ups Positive performance of the merchant business +6.8% 4,494 — Strong growth in Bulk supported by Cylinder 4,208 merchant LNG — Recovery of late cyclical cylinder business in H1 2011 2010 2011 *excluding currency, natural gas price and consolidation effect 7
  • 8. Engineering Division, key figuresOrder intake well balanced— Order intake increased by 3.5% to € 2.235 bn— Order backlog stays strong at € 3.600 bn (year-end 2010: € 3.965 bn)— Exceptional operating profit* margin in 2011 of 12.0%— Operating profit margin in 2012 of at least 10% due to continuation of positive effects from successful execution of individual projects Order Intake by Region Order Intake by Plant Type Order Backlog by Plant Type 2011 2011 Hydrogen/ Other Olefin Synthesis 7.4% Plants EMEA 25.7% Air Separation Plants Gas Plants 28.6% 32.4% 18.9% Hydrogen/ 21.5% Synthesis Gas Plants € 3.6 bn 44.1% ASIA/PACIFIC 15.8% Olefin Plants 23.4% Natural Gas Plants Air Separation Natural Gas Plants Plants 23.5% AMERICAS 13.6% 24.7% 20.4% Other*EBITDA incl. share of net income from associates and joint ventures 8
  • 9. HPO (High Performance Organisation)Covering the full value chain in all regions— HPO is fully on track with savings – additional savings of ~ € 160 m— Initiatives have been launched and rolled out in all relevant areas— Contribution expected also in 2013 ff.— Gross cost savings increased to € 620 mAccumulated gross cost savings 650-800in € million 160 Bulk Supply Chain ~35% 160 Cylinder Supply Chain ~25% 300 Procurement/Others ~25% SG&A ~15% 2009 2010 2011 2012 9
  • 10. Mega-trendsLeveraging growth with our Gas & Engineering set-upGrowth Markets Energy/Environment Healthcare Leveraging Gases & Engineering business synergies 10
  • 11. Mega-trend Growth Markets Industrial gases market 2011 vs. 2020 in € bn Market leader in 4 out of 5 Growth Markets ~20~23 ~23 ~13 ~16 ~16 ~16 ~5 ~5 ~16 ~10 ~6 ~2~5 ~2 2.2 #1 #1 ~10 ~4 ~5 ~5 ~1 ~5 ~1 #1 ~2 ~0.5 ~0.5 ~2 ~2 #2 #1 ~1Growth Markets Mature Markets 2020 2020 2011 2011 Source: Linde database, figures excl. Japan, equipment, healthcare and major impact out of future growth markets of the energy/environment sector 11
  • 12. Mega-trend Growth MarketsStrong investments in future growthGrowth Markets exposure Majority of Capex 2011further increased invested in Growth MarketsGrowth Market sales (% of Gases sales) Gases Capex 2007 – 2011 in € bn 36% 1.5 1.4 35% 1.3 34% 1.1 0.8 1.0 0.6 33% 0.7 32% 32% 0.6 0.6 0.7 0.8 29% 0.5 0.6 0.4 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Excl. JVs Incl. JVs Mature Markets Growth Markets 12
  • 13. Mega-trend Growth Markets Comprehensive strategy to capture growth potential in Asia Consolidates sales in Asia in € m Major investment commitments in 2011 Construction of ASU in Map Ta Phut, Thailand (largest ASU) Greater 2011 701 +22% - Investment ~ € 78 m, on-stream date 2013* China 2010 576 Signed contract with PT Krakatau POSCO, Indonesia (largest ASU) South & 2011 975 - Investment ~€ 80 m, on-stream date 2013* East Asia 2010 861 +13% Second ASU in Giheung, Korea - Investment ~€ 120 m for Samsung; largest investment in Korea Wu´an, China (Q4/2011) - On-site supply contract with Hebei Puyang Iron and Steel Ltd. - Decaptivation of 7 ASUs with energy efficiency upgrade andPakistan Korea construction of a new ASU: ~ € 120 m capex, on stream date 2014* #1 China #1 Jilin, China (Q4/2011) - On-site supply contract with Evonik Industries and Jilshen Bangladesh #1 Taiwan - Hydrogen plant (SMR): ~€ 42 m capex, on stream date 2013/2014* #1 #1 Yantai, China (Q3/2011) India Thailand Vietnam - On-site supply contract with Wanhua Polyurethanes Co., Ltd. #1 #1 Philippines - Two large scale ASUs: ~€ 130 m capex, on stream date 2013/2014* #1 Malaysia Chongqing, China (Q2/2011) Sri Lanka Singapore - On-site supply contracts with CCPHC and BASF #1 - Large scale HYCO plant: ~€ 200 m capex, on stream date 2014* Indonesia Chongqing, China: - On-site supply contract with Sinopec, on stream date Q2/2011 * to be expected 13
  • 14. Mega-trend Energy/EnvironmentLeadIng joint capabilities & access to Energy/Environment sector Engineering Division Gases Division Mega-projects Proven technology and project execution Proven long-term operations track record Technology Know-How Energy: LNG (Merchant/Floating), EOR/EGR, Coal-to-X, Gas-to-X, Bio-to-X, Geothermal Environment: OxyFuel, Post-combustion CO2-capture and handling, H2-fueling Efficiency & Applications: Higher energy efficiency of plants, REBOX® oxy-fuel, WASTOX® Long-term Customer Relations Competitive Products and Services Plant Sales Commodity Customers for with focus on price/energy efficiency (TCO) and reliability captive customer 14
  • 15. Mega-trend Energy/EnvironmentImportance of new technologies & industrial gases applications Global energy consumption* Energy/Environment annual market revenue estimates*700 Renewables € 80 -140 bn500 Nuclear € 14 -19 bn Coal CO2 emission reduction300 € 5 -7 bn Natural Gas CLEAN COAL Petroleum Liquids100 CO2 HANDLING 2010 2015 2020 2030 H2 FUELING Source: U.S. Energy Information Administration RENEWABLES (e.g. BIOMASS GASIFICATION, PHOTOVOLTAIC)— Fossil resources remain dominant LNG energy source EOR (N2 / NRU / CO2)— Fossil resources becoming scarce 2015 2020 2030— CO2-emissions steadily increasing Increasing energy consumption & CO2 emission— Importance of renewable energy Annual market revenue in the respective year Pilot projects and small volumes increasing but still limited reach * in quadrillion British Thermal Units (equals around 1027 Joules) *Assuming 100% Build Own Operate and excluding sale of equipment and plants (Please find assumptions for estimates on page 49) 15
  • 16. Mega-trend Energy/EnvironmentOpportunities in shale gas business: Example US Active major shale gas fields Expected development of US shale gasNatural gas processing plant in the USA production in the next decade (in Bcf) Barnett 5.5 Fayetteville 4.5 Woodford 2.0 Haynesville 8.0 Marcellus 4.5 Bcf = billion cubic feet Source: EIA, “Oil and Gas Field Maps”; Linde database; NavigantEngineering— Total order intake since 2010 > € 400 m— Opportunities within the field of shale gas: — Natural gas processing plants: driven by the necessity of gas treatment for pipeline and bulk use — Small-mid-scale LNG plants: driven by increasing demand for merchant LNG — Ethane cracker: feasible for gas fields without petrochemical clustersGases— Potential leverage of our operation experience into the area of shale gas— Based on shale gas new chemical clusters develop with the need for industrial gases supply 16
  • 17. Mega-trend Healthcare Market environment and driversMarket environment Drivers of development New and innovative pharmaceuticalIncreasing and ageing population gases and services Quality and optimum care for patientsIncreasing wealth in Growth Markets Value creation by cost-effective and reliable products and servicesHealthcare budget pressure and regulation Regional expansion Relevant Healthcare markets 2011 vs. 2020 in € bn ~1.8 ~5.7 2020 ~5.8 Mature Markets ~8.1 ~3.9 2011 ~5.8 2.2 2020 Growth Markets 2011 ~1.0 ~2.2 Source: Linde database, figures incl. gas therapies and intermediate care 17
  • 18. Mega-trend Healthcare From medical gas provider to solutions & service provider Development of new therapies Homecare — Home oxygen therapies and applications — Ventilation services — Sleep therapiesCost ease to Healthcare budgets — Other service Intermediate Care — Patient centered care — REMEO: treatment and care of chronic patients with mechanical ventilation needs Gas Therapies — Pulmonary hypertension & cardio-thoracic surgery — Oxygen & Heliox therapies — Pain relief Hospital Care — Bulk supply and technical assistance — Logistics and installation — Customer Service — Hospital & medical gas services Integrated service provider 18
  • 19. Mega-trend HealthcareHomecare: growth through innovation and regional expansion EMEA AMERICASLinde Homecare sales ASIA/by operating segments 2011 78% 18% 4% PACIFIC Home Oxygen Therapy Sleep Therapy Ventilation Services Chronic respiratory diseases, Obstructive Sleep Apnea, Advanced respiratory diseases patients need oxygen patients need positive air patients need mechanical (COPD, Asthma) pressure during sleep ventilation support Products: LOX, GOX and Products: Positive Airway Products: Mechanical Concentrators Pressure Devices, Masks Ventilators, Equipment Synergies: sales & marketing, logistics, integrated patient management, care center, adherence programme, technology development 19
  • 20. OutlookProfitable Growth.2012 Group — Growth in sales and operating profit vs. 2011 — Confirmation of HPO-programme: € 650-800 m of gross cost savings in 2009-2012 Gases — Sales increase vs. 2011 — Continuous improvement of productivity Engineering — Sales at the same level as in 2011 — Operating margin of at least 10%2014 Group — Operating profit of at least € 4 bn — Adjusted* ROCE of 14% or above Gases — Average capex/sales ratio 13% plus — Revenue increase above market growth — Further increase in productivity*please see definitions on page 54 20
  • 21. AgendaPart 1 Prof. Dr Wolfgang Reitzle1. 2011 Highlights and Divisional Performance2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends3. 2012 OutlookPart 2 Georg Denoke1. Operational Performance2. Project Pipeline and Capex3. Financial PerformanceAppendix 21
  • 22. GroupFinancial key indicators again on record levelsProfitable growth for our shareholders— adjusted EPS up by 11.9%— adjusted ROCE further improved by 50 bp Adjusted* EPS Adjusted* ROCE Operating Cash Flow in € m, as reported €6.89 7.71€ 2,422 2,426 €5.46 6.89€ €4.58 2,142 4.58€ 13.0% 12.5% 10.4% 2009 2010 2011 2009 2010 2011 2009 2010 2011*please see definitions on page 53 22
  • 23. Gases Division, Q4 sales by product areasQ4 development above market averagein € million, comparable* (consolidated) +5.5% 2,791 2,645* Continued growth in Healthcare 309Healthcare 294 +5.1% — New tender wins 680 Sound growth in Tonnage Tonnage 647 +5.1% — Scheduled maintenance shut downs — Less start-ups than in previous quarters +7.2% 690 Bulk 644 Positive performance of the merchant business — Positive contribution from pricing initiatives — Solid volume growth in Bulk, despite base effect +4.9% — Seasonal lower CO2-sales Cylinder 1,060 1,112 Q4 2010 Q4 2011 *excluding currency, natural gas price and consolidation effect 23
  • 24. Gases Division, product areasComparable* year-on-year growth in percentHealthcare Tonnage 13.3 11.1 10.3 12.1 10.0 10.75.5 5.8 5.7 6.5 5.8 6.5 4.0 5.0 4.2 5.1 5.1 5.1 2.7 3.7 1.5 -1.7 -4.4 -6.5Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2009 2010 2011Bulk Cylinder 11.4 9.9 8.4 7.5 8.4 6.3 7.3 7.2 6.4 5.2 5.1 4.8 5.3 4.9 3.2 0.5 0.0 -5.5-6.9 -7.9 -9.1 -9.1 -11.1 -12.2Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2009 2010 2011*excluding currency, natural gas price and consolidation effect 24
  • 25. Gases Division, sales by operating segmentGrowth in all regions led by Asia/Pacific and Americas Mature Markets Growth Markets 2011 65% 35% in € million EMEA Asia/Pacific Americas 5,330 5,672 +6.4% 3,076 2,279 2,384 2,692 +14.3% +4.6% +5.7%* +9.2%* +9.1%* 2010 2011 2010 2011 2010 2011 — Solid growth in all regions — Growth in Asian regions — Healthcare growth supports — Growth driven by cylinder led by China and India double digit growth in South and bulk business in — Bulk continued solid America Continental Europe growth trend in all — Highest growth rates in regions North America in Tonnage*excluding currency, natural gas price and consolidation effect 25
  • 26. Gases Division, operating profit by operating segmentProfitable Growth continued in 2011 Mature Markets Growth Markets 2011 68% 32%in € million EMEA Asia/Pacific Americas 1,634 1,513 +8.0% 28.8% 28.4% 872 499 535 754 +15.6% +7.2% 28.3% 22.4% 28.0% 21.9% 2010 2011 2010 2011 2010 2011— Continuous implementation of HPO supports margin development in all regions— Positive margin track record in EMEA continued— Despite investments in future structural growth in Asia the margin exceeds level of 2010 26
  • 27. Gases Division, Split of CapexGrowth Markets Capex increased to above 50 percentSplit Capex by operating segments Split Capex by marketsin € million 1,439 2011 +8.5% Growth Markets 1,326 +1.8% 627 EMEA 2010 616 54% 46% 54% 46% +19.3% 587 Asia/Pacific 492 218 +3.2% 225 Americas Mature Markets 2010 2011 27
  • 28. Gases Division, project pipelineGood basis for sustainable growth— € 4.1 bn investments between 2009-2013 (thereof € 0.6 bn in JVs @ share)— Project amount for 2012 and 2013 further increased by around € 200 m— 2014 project amount already at around € 550 m— Around 70% of total project-Capex allocated to Growth Markets— Amount of project opportunities remains with € 4.3 bn on a high level Project amount by on-stream date (incl. JVs) in € m ~800 ~800 ~750 50 ~650 150 ~550 ~500 700 2009 2010 2011 2012 2013 2014 (Projects > € 10 m) 28
  • 29. Gases, Capex Development Capex Sales Ratio 2007 - 2011 15% 13% 13% average 2011-2014 13% plus*Capex/Sales Ratio 12% 11% ~1,800 1,451 1,439 1,326 1,062 1,029Capex in € million 2007 2008 2009 2010 2011 2012 Data 2007-2011 @ actual average fx rates at the end of the respective year * plus: additional potential for mega-projects 29
  • 30. Group, solid financial position Sound financial strategy Net debt (€ m) Net debt/EBITDA 12,815 5 4.8 9,933 4 6,427 6,423 6,119 3 2.7 2.6 2.5 5,497 5,094 2 1.9 1.6 1 0 30/09/ 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 2006 Credit Ratings — Standard&Poor‘s: A-/A-2 with stable outlook (27/10/2011*) — Moody´s: A3/P-2 with stable outlook (12/10/2011*)* Date of latest rating report 30
  • 31. Group, solid financial positionNet debt reduction of € 403 millionin € million 1,254 5,497 2,426 5,094 12 757 Net debt Cash flow from Operating Net interest Other FX & Fair Value 31/12/2010 investment cash flow Dividends Accounting activities excl. inv. in liquidity reserve 31
  • 32. Group, solid financial positionEarly refinancing of existing financial debtContinuous efforts to extend the Group’s maturity profile— ~€ 360 m partial bond buyback and issuance of € 600 m notes due in 2021 Financial debt, by instrument— Issuance of € 750 m senior notes due in 2018 2%— More than 80% of total financial debt is due beyond 2012 7% 19% 10%— Approx. 56% of total financial debt has a longer maturity than 5 years 1% 2%Balanced mix of various financing instruments 67%— Strong focus on long-term bond financing— Strategic funding in EUR, GBP, USD and AUD 72% 4,344Financial debt, by maturity (in € m) 3 Other Bonds 2,880 Subordinated Bonds (*callable in 2013/2016) 2,147 224 Commercial Paper 1,277 Bank Loans 349 1,923 132 1,461 796 < 1 year 1 - 5 years > 5 years 32
  • 33. Group, Pensions Performance and key figures 2011Net obligation Performance of major pension plans in € million DBO Plan Net asset obligation United Kingdom Germany01/01/2011 4,971 4,467 504Service costs 88 88 14.6%Net financing 253 254 -1 12.3% 12.8%Actuarial losses/gains 335 153 182 11.6%Contributions/payments –213 –13 –200Other -33 -19 -1431/12/2011 5,401 4,842 559 6.0% 5.0%Pension plan assets portfolio structure 2010 12% 57% 25% 2011 actual 2011 actual 2011 expected 2009 -2011 avg. 2009 -2011 avg. 2011 expected 1% 5% 2011 12% 64% 20% 1% 3% Fixed-intrest securities Equities Others Insurance Property 33
  • 34. GroupFinancial Result and Tax Rate Financial Result (in € million) Tax Rate 385 329 280 291 22.9% 23.9% 23.2% 22.1% 2008 2009 2010 2011 2008 2009 2010 2011 34
  • 35. Group, dividends Proposed dividend increased by 13.6% to € 2.50 +13.6% € 2.50 € 2.20 +22.2% +5.9% € 1.80 stable € 1.80 +13.3% € 1.70 +9.7% €1.50 Change in +22.6% Operating Profit +5.4% +18.1%* -6.7% 2006 2007 2008 2009 2010 2011* Comparable change: prior year figures including twelve months of BOC 35
  • 36. SummaryProfitable Growth.New record levels achieved in 2011Group sales and profit on record levelsGroup operating margin and Gases operating margin further improvedNet debt reduced to a net debt/EBITDA ratio of 1.6xResilient business model and competitive set-up for sustainable profitable growthMore than a third of revenues from Growth MarketsFocus on Mega-trends Healthcare and Energy/EnvironmentLeveraging business synergies of Gases & EngineeringSustainable cash flow generation and further optimised long-term financingCapex/Sales ratio 13% plusResilience of business model further optimisedImplementation of High Performance Organisation on track 36
  • 37. AgendaPart 1 Prof. Dr Wolfgang Reitzle1. 2011 Highlights and Divisional Performance2. Strategic Focus: — High Performance Organisation — Growth Potential Mega-trends3. 2012 OutlookPart 2 Georg Denoke1. Operational Performance2. Project Pipeline and Capex3. Financial PerformanceAppendix 37
  • 38. Group, FY 2011Key P&L itemsin € million 2010 2011 ∆ in %Sales 12,868 13,787 7.1Operating Profit 2,925 3,210 9.7 Margin 22.7% 23.3% +60 bpEBIT before PPA depreciation 1,933 2,152 11.3PPA depreciation -254 -242 -5.0EBIT 1,679 1,910 13.8Financial Results -280 -291 3.9Taxes -335 -375 11.9Net income 1,064 1,244 16.9Net income – Part of shareholders Linde AG 1,005 1,174 16.8EPS in € 5.94 6.88 15.8Adjusted EPS in € 6.89 7.71 11.9 38
  • 39. Group, Q4 2011Key P&L itemsin € million Q4/2010 Q4/2011 ∆ in %Sales 3,463 3,578 3.3Operating Profit 780 847 8.6 Margin 22.5% 23.7% +120 bpEBIT before PPA depreciation 509 572 12.4PPA depreciation -63 -61 -3.2EBIT 446 511 14.6Financial Results -50 -76 52.0Taxes -80 -94 17.5Net income 316 341 7.9Net income – Part of shareholders Linde AG 307 318 3.6EPS in € 1.81 1.86 2.8Adjusted EPS in € 2.01 2.03 1.0 39
  • 40. Group, FY 2011Cash Flow Statement in € million Q1 11 Q2 11 Q3 11* Q4 11* 2011* 2010 Operating profit 761 798 804 847 3,210 2,925 Change in Working Capital -180 6 60 39 -75 84 Other changes -141 -267 -142 -159 -709 -587 Operating Cash Flow 440 537 722 727 2,426 2,422 Investments in tangibles/intangibles -237 -310 -346 -452 -1,345 -1,192 Acquisitions/Financial investments -13 -1 -41 -23 -78 -68 Other 43 33 40 53 169 195 Investment Cash Flow -207 -278 -347 -422 -1,254 -1,065 Free Cash Flow before Financing 233 259 375 305 1,172 1,357 Interests and swaps -45 -114 -123 -56 -338 -298 Dividends and other changes -2 -385 -7 -11 -405 -280 Net debt increase (+)/decrease (-) -186 240 -245 -238 -429 -779* excluding investments in securities of € 600 m in Q3 and € 1,052 m in Q4 40
  • 41. GroupFree Cash Flow before Financing (2011 vs. 2010) in € million Investing CF Operating CF Free CF 2011 vs. 2010 2011 -207 440 233 Q1 2010 13.1% -191 397 206 2011 -278 537 259 Q2 -0.4% 2010 -245 505 260 2011 -347* 722 Q3 375 -7.2% 2010 -227 631 404 2011 -422* 305 Q4 727 2010 -37.4% -402 889 487 2011 -1,254* 2,426 1,172 Total -13.6% 2010 -1,065 2,422 1,357* excluding investments in securities of € 600 m in Q3 and € 1,052 m in Q4 41
  • 42. Group, solid financial positionLiquidity reserve again further strengthened€ 2.5 bn committed revolving credit facility— Arranged in May 2010 with 25 national and international banks— Maturing in 2015— No financial covenants— Fully undrawnMore than € 2.6 bn cash and securities 3,897in € million (31/12/2011) 2,500 1,674 1,000 -1,277 Short-term Cash and cash Current securities and Revolving Liquidity reserve financial debt equivalents strategic liquidity credit facility reserve of € 600 m 42
  • 43. Division Gases, sales bridgeFY 2011 sales increased by 7.4% on comparable basisin € million +7.4% 11,061 +0.3% -0.2% +0.6% 10,228 FY 2010 Consolidation Currency Natural Gas Price/Volume FY 2011 43
  • 44. Gases DivisionJoint venturesin € million Proportionate Sales* Share of Net Income (not incl. in the Group top-line) (contribution to operating profit) +13.8% +4.2% 453 85 89 398 2010 2011 2010 2011 * Adjusted for local accounted joint ventures 44
  • 45. Engineering Division, key figures Order intake up by 3.5%in € million in € million Order Intake Sales +3.5% +2.8% 2,159 2,235 2,461 2,531 2010 2011 2010 2011in € million Operating Profit* Operating Margin +12.3% +100 bp 304 11.0% 12.0% 271 2010 2011 2010 2011 *EBITDA incl. share of net income from associates and joint ventures 45
  • 46. Engineering DivisionFY 2011 order intake by plant type and region Order Intake by Plant Type Order Intake by Region 2010 2011 2010 2011 28.3% Air Separation 25.7% 57.2% EMEA 32.4% Plants Hydrogen/ 16.2% Synthesis Gas 21.5% Plants 44.1% Olefin Plants 15.8% 28.5% ASIA/PACIFIC 27.2% 23.4% Natural Gas 16.7% Plants 23.5% AMERICAS 10.3% Other 13.6% 15.6% 46
  • 47. Engineering DivisionSolid and diversified order backlogOrder backlog by plant type (31/12/2011) Other: 7.4% (2010: 4.6%) Synthesis Gas Plants: 18.9% Olefin Plants: 28.6% (2010: 14.7%) (2010: 43.5%) Air Separation Plants: 24.7% Natural Gas Plants: 20.4% (2010: 24.7%) (2010: 12.5%) 47
  • 48. Mega-trend Energy/Environment Current and future growth markets for Gases & Engineering Better use of fossil resources: Renewable energy: Clean energy: Existing growth markets Developing growth markets Future growth markets Liquified Natural Statoil plant, Hammerfest, Photo- Signed Gases contracts for Vattenfall Pilot Project, voltaic 6 GWp of nominal capacity OxyFuel Gas (LNG) Floating LNG Schwarze Pumpe, Germany Gas-To-Liquid Pearl GTL project, Waste Management JV Post-comb. RWE/BASF Pilot Project, Bio to Liquids plant started up in 2009 CO2 capture Niederaussem, Germany — (GTL) xxx Qatar Shell GTL LTd Biomass- Choren/Sun Fuel Pilot Recycling CO2 (OCAP, Nld) RECTISOL® CO2 wash, used CO2 handling CO2 scrubbing Conversion Project, Germany CO2SINK, Ketzin, Germany at Hammerfest LNG plant Statoil LNG plant, Norway ASUs and Rectisol for coal Turbines for geothermal Coal-to-Gas Geothermal gasifications in China project in France Coal Tonnage contract with Automotive H2 Mobility Initiative launched liquefaction Bayer/SCCC1 in China Hydrogen with key industrial partners Enhanced Oil& Pemex Cantarell project, Mexico Gas Recovery Adnoc Joint Venture, Abu Dhabi Refinery Tonnage contracts with Shell, Hydrogen EMAP, Chevron, CITGO,… Higher efficiency in energy use: Sustained growth in traditional end markets REBOX® oxy-fuel (steel), WASTOX® (aluminium), Oxygen burner (glass), Water Treatment, …1 Shanghai Cooking & Chemical CorporationBusiness model Linde: Engineering Gas Supply Maturity of business: Existing business Pilot on-going 48
  • 49. Clean Energy market estimation 2020 & 2030 top downMarket size in € bn 2015 2020 2030 Assumptions for 2030 – Triple-digit number of 1 GW Carbon Capture Clean Coal --- --- 20 – 40 (1.5 Gt/a CO2 at EUR25-40/t) – Installation of significant pipeline network and corresponding 1 15 – 25 compression CO2 networks small (1.5 Gt/a handling fee CO2 at EUR 10-15/t) – Installation of a significant fuel station infrastructure H2 fueling small 1 10 – 15 – Corresponding annual H2 consumption of some bn tons p.a. – Single to double digit number of large N2 EOR/NRU projects EOR/EGR* 1.5 4-5 18 – 35 – Double digit number of large CO2 EOR projects including industrial CO2 capture and pipeline (overlapping w/CCS) – Based on penetration rate of LNG replacing existing fuels – Merchant LNG projects based on geographical set up and LNG 3-4 6 - 10 11 – 23 existing infrastructure – Floating LNG projects – Includes mainly gases used for manufacturing of Renewables 1 2 3 photovoltaic cells * Assuming 100% Build Own Operate and excluding sale of Range 5-7 14 - 19 18-140 equipment and plants.General assumptions:— Market numbers are directional only and w/o inflation or currency— Oil price development at 80-100 USD/bll— Outsourced gases market only (excl. captive market or equipment sales) 49
  • 50. GroupReconciliation of Capital Employed 31/12/2010 31/12/2011 Key Financial As reported Non-GAAP Key Financial Effectsin € million Figures adjustment FiguresEquity incl. minority 10,572 12,144 -649 11,495 PPA and disposal effectsinterestPlus: financial debt 6,673 7,768 7,768Plus: liabilities from 49 46 46financial leaseLess: receivables from 392 352 352financial leaseLess: Cash, cash 1,176 2,674 2,674equivalents and securitiesPlus: Net pension 552 611 611obligationsCapital employed 16,278 17,543 -649 16,894Average Capital employed 15,451 17,305 16,586Return on CapitalEmployed (ROCE) 12.5% 11.0% 13.0% 50
  • 51. GroupReconciliation of EPS 31/12/2010 31/12/2011 Key Financial As reported Non-GAAP Key Financial Effectsin € million Figures adjustment FiguresEBIT before special items 1,933 1,910 242 2,512 PPATaxes on income -427 -375 -101 -476 deferred taxes on PPAEarnings after taxes 1,167 1,174 141 1,315and minority interestEPS (in €) 6.89 6.88 7.71Weighted average 169.3 170.6 170.6no. of shares (in million) 51
  • 52. GroupPPA – Expected Depreciation & Amortisation— Development of depreciation and amortisation (in € million)— Impact in 2011: € 242 millionExpected range2012 > 175 – 225 PPA Depreciation Planning (in € m)2013 > 190 - 210 400…2022 < 125 300 200 100 0 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 52
  • 53. Group, Definition of financial key figures Operating Return EBITDA (incl. IFRIC 4 adjustment) excl. finance costs for pensions Profit excl. special items incl. share of net income from associates and joint ventures adjusted Return Operating profit - depreciation / amortisation ROCE excl. depreciation/amortization from purchase price allocation Average equity (incl. minorities) Capital + financial debt Employed + liabilities from financial leases + net pension obligations - cash, cash equivalents and securities - receivables from financial leases adjusted Return earnings after tax and minority interests + depreciation/amortization from purchase price allocation EPS +/- special items Shares average outstanding shares 53
  • 54. Investor RelationsContactPhone: +49 89 357 57 1321eMail: investorrelations@linde.comInternet: www.linde.comFinancial Calendar— Interim Report January to March: 4 May 2012— Annual General Meeting: 4 May 2012— Interim Report January to June: 27 July 2012— Interim Report January to September: 29 October 2012 54

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