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1. Introduction
Due to Linde’s matrix organisation, establishing and communicating standards and procedures for
planning & forecasting is key in order to reach excellent data consistency and quality. Linde’s matrix
structure intends for empowering business units and ensuring optimal resource allocation within
and outside the organization at different levels.
Course Overview:
This course provides an overview of the framework, systems, processes and policies used during the
different planning events.
After completion of this course you will be able to:
 Have an integrated planning solution within the SAP environment.
 Identify the transparent process through defined interfaces between sub-plans.
 Describe the planning and forecasting by reducing complexity.
 Understand the comparison between FC, Budget, and MTP with actuals.
 Identify KPIs as cornerstones for planning and forecasting contents.
INDEX
1. Planning and forecasting framework.
2. Planning and forecasting systems.
3. Mid Term Planning.
4. Course Summary.
5. Assessment.
1. Planning and Forecasting Framework.
Planning and forecasting manual provides the integrated solution for different levels of planning
processes.
1.1 Key Objectives
The primary objective of Linde’s planning & forecasting approach is to have an integrated planning
solution within the existing SAP environment. The primary goals of the Global Planning Solution
(GPS) are:
-Close link between Strategic Targets and Mid-Term Planning
- Clear understanding of roles and responsibilities
- Consistent and transparent process through defined interfaces between sub-plans
- Effective and efficient planning & forecasting by reducing complexity
- Agreed KPIs as cornerstones for planning & forecasting contents
- Comparability of FC, Budget and MTP with Actuals

2. 1.2 Planning events
The Linde Group’s planning process starts in January where the Top 40 Executives assess the strategic
direction. MTP cycle starts with the the strategic planning and the HPO Programme planning for the
target setting process in July. Forecast 3,Budget and three more plan years, with four years of planning
are included in MTP.
Forecast 1 serves as an updated outlook for the current year. In general, it will be based on April
Actuals.
Another early year planning includes Year-End Capex/Revised Capex Budget which aims to update
Major Projects for the Year-End Actuals and final project budget carry-over into next year(s).
1.2.1 Forecast 1 (FC1)
The forecast serves as an update of the Budget, providing an outlook for the current year.
1.2.2 Strategic Planning
The Strategic Planning process is owned by Corporate Strategy & Market Intelligence (CS&MI) with
support from FFC. A general kick-off from a Group’s strategic perspective is set with a meeting of all
Top 40 managers in January each year. The specific preparation of the GGC, OPD, T&I as well as RBU
and Engineering strategy dialogues is coordinated by CS&MI. The strategy meetings are held in May.
1.2.3 Forecast 3 (FC3) and Mid-Term Planning (MTP)
Based on the Strategic Planning, the MTP cycle serves to translate the strategic direction into a specific
financial plan. The MTP planning process is based on a top-down/bottom up approach.
FC3 is run in parallel with the MTP cycle and provides the starting point for the Budget. Hence, the
data collected for FC3 have the same level of detail as the Budget.
The MTP planning horizon is four years. MTP includes the Budget and another three plan years. The
latter is planned on a less detailed level than the Budget. Data for these years will not be collected in
the system, but in a customised Excel-template. Planning of MTP will be done on regional (divisional)
level. FFCR will distribute and coordinate the MTP planning Excel-templates submission.
A simplified B/S in excel is requested for FC3, BU as well as for the 3 following planning years. FFCR
will distribute appropriate templates for this purpose and coordinate the process.
After final approval, the Budget figures need to be phased with the exception of Capex.
1.2.4 Year-End Capex/Revised Capex Budget
The submission of Year-End Capex/Revised Capex Budget serves to collect detailed Year-End Capex
data and to update the carry-over amounts of Major Projects based on the year-end Actuals.
A Capex Year-End & Revised Budget Manual is distributed by FFCB. Submission date is normally
scheduled at the end of January or early February, subsequent to the year-end closing.
Over the course of the year, the Capex Budget is regularly updated by FFCB in order to reflect the
latest status, including all project approvals.
1.3 Sub-Plans

3. Overall planning process consist of multiple sub-plan which interface with other planning components.
1.3.1 Gases Sales Planning
For Division Gases a detailed sales plan must be submitted in the Gases Sales Reporting (GSR) tool.
FC3 and BU data comprises the same dimensions for sales figures and volumes (volumes for molecules
only) as FC1 or FC3/BU last year:
- Business Segment Split along Org. Units (Tonnage, ECOVAR, Hospital Care, Homecare, Bulk, PGP, and
Electronics (Tonnage, Bulk and PGP portion); I/C planned separately per Partner, incl. Sub-Org.Unit
split)
- GPH Minor Code and Condition
- Market Segments
1.3.2 Global Functions Planning
Within The Linde Group, Global Functions fall into either of the following two categories:
- Global Governance Centres
- Corporate & Support Functions
The activity centre split in the Management Statistics serves to plan and report costs of each Global
Function separately in GPS. DCUs thus need to report any Global Costs on the applicable activity
centre(s).
1.3.3 Capex Planning
Capex Planning forms an essential part for planning and forecasting framework. As Capex for major
projects is distributed among all levels of forecast and budget, its actual spending with budgeted on
top-to-bottom approach is indispensable. For further detailed explanation can be from an investment
module.
1.3. 4 Liquidity Planning (LFO)
The L/*uidity Forecast (LFO) is vital for managing and safeguarding the Group’s financial liquidity,
identifying financing needs (internal/external), optimising net interest result and obtaining
information about the FX exposure. Group Treasury therefore requests a rolling liquidity forecast with
a 15 months (FC 1)/16 months (FC3) planning horizon.
The LFO will be aligned with the GPS reporting (same hierarchy and same CoA).
There will be no validations between GPS and the liquidity forecast set-up as GPS will not include a
B/S.
1.3.5 Financial Planning

4. Financial Planning includes all information required to prepare a plan P/L and C/F. It thus includes EFL,
Pension, Tax as well as supplementary information in the Management Statistics.
As mentioned above, in order to improve the cash flow planning (OP/change in TWC/Capex) a
simplified B/S will be requested in Excel format for FC1, FC3, BU and for the three following planning
years.
Financial planning information may be used as base for Impairment tests during the year-end audit
process.
1.3.6 Interfaces to Other Planning Components
The MTP cycle builds on the Strategic Planning. The results of the Strategic Planning serve as an
indication/benchmark for the top-down target setting.
Both IS and LGS have a centrally coordinated planning process. Local, sub-regional, regional and Global
costs are planned using a customised template.
For IS, the outcome of this process will be directly communicated to Local FiCo by IS after this has
been discussed within the IS Management Team and with the RFDs. This centrally coordinated process
does not apply for IS CAPEX which has to be planned according to the specific CAPEX MTP instructions.
Certain M&A information is needed by Group Treasury in order to correctly project cash flows going
forward. This information is provided by FMA.
2. Planning and Forecasting Systems
2.1 Global Planning Solutions (GPS)
GPS is integrated into LiFT with in principle the same concept, processes, validations and
consolidations. Its main objective is to simplify planning and forecasting activities, e.g.:
- Provide an integrated planning system for The Linde Group
- Facilitate data entry for DCUs
- Reduce data upload effort; improve speed & ease of upload methods.
2.2 Plan Hierarchy
For all upcoming planning events the planning hierarchy will be based on the actual LiFT IFRS
hierarchy. No legal hierarchy will be planned.
The planning will take place on DCU level only. No planning on Plan dummy unit as only actual LiFT
reporting is done.
2.3 Plan Chart of Accounts (Plan CoA)
Planning is generally based on the actual Chart of Accounts (CoA). There is no change to the structure
of the CoA for planning purposes, i.e. sections of CoA, account structure and sub-assignments are not
modified.

5. 2.4 EFL, PPA and Pension
The planning for EFL and PPA follows the same upload method as for Actual, i.e. the tools used for
Actual will also be used for planning. The data will be directly uploaded into BCS.
The account structure used in the tools remains unchanged. Hence, all accounts which are used for
actual reporting can also be used for planning purposes.
For pensions, please use the Q4 prior year pension quest which includes the pension projections for
next year on the “PEB-Plans” tab. The forecasted P&L should be included in your FC1 planning data of
the respective DCU. No upload of the pension quest is needed.
2.5 Consolidation
This section focuses on the plan consolidation specifics with references to the actual consolidation
set-up.
For the actual reporting, consolidation has been set up for two hierarchies, Legal (RH) and Segment
hierarchy (MH). For planning purposes, only the Segment hierarchy is used. The actual IFRS hierarchy
of version 102 (actual) closing thus provides the basis and has to be implemented for each version of
the planning period. All DCUs incl. proportional consolidated DCUs have to report @100% view.
Quotation for proportional (line by line) consolidated DCUs (e.g. Adnoc/Elixier DCU 323101) and
proportion of IC partner information with those partner DCUs will be carried out automatically in LiFT
system. Each planning period carries a different version number.
The planning process covers the following planning periods:
Forecast 3 (FC3) (Version 230)
- FC3 covers a full year
- Profit and Loss Statement needs to be provided for each DCU
- All P/L related I/C elimination processes will be carried out.
Budget (Version 300)
- BU covers a full year
- Profit and Loss Statement needs to be provided for each DCU
- All P/L related I/C elimination processes will be carried out.
Budget (Version 310)
- Monthly BU divides the full year BU into 12 month
- Profit and Loss Statement needs to be provided for each DCU
- All P/L related I/C elimination processes will be carried out.
MTP Year 2, MTP Year 3, MTP Year 4

6. - No Mid term planning of year 2/3/4 will take place in the system. You will receive further instructions
by FFCO regarding use of an Excel Template.
2.6.1 Consolidation Unit Hierarchy
Detailed description for Hierarchy used in the planning process is given in Planned Hierarchy (3.2).
Any acquisitions, disposals or other changes to the hierarchy must be agreed with FFCO and Group
Accounting & Consolidation department (FARA) in advance.
2.6.2 Data Entry by DCUs
Data in GPS is either submitted on a single DCU or a so-called Plan Dummy Unit that covers several
DCUs that would usually report separately in LiFT.
Single DCU
The data entry for a single DCU is similar to the actual reporting, merely applying the Plan CoA.
Plan Dummy Unit
A Plan Dummy Unit consists of several single DCUs that report in the same currency.
2.6.3 Balance Carry-Forward
For Version 300 BCS Task “GPS: BCF & Copy PL00-10” and for Version 310 BCS Task “GPS:BCF&Copy
310” needs to be done.
2.6.4 Currency Translation
As for actual reporting, the financial planning data of the DCUs will be reported in local currency. It is
therefore necessary to translate this data into group currency before consolidated financial
statements can be generated.
The currency conversion will be done in SEM- BCS by the currency translation task. The currency
translation of the Planning versions will be a simplification of the Actual versions.
2.6.5 I/C Reconciliation
The reconciliation is only performed for P/L items.
- The entry of inter-company data must always include the respective partner information. For FC1 as
well as FC3 and Budget, all DCUs must do a proper reconciliation for the defined scope. Partner
information is needed for I/C data relating to trading activities between DCUs (Subsidiaries and
JV/Associates). In order to limit the number of line items for the planning CoA, I/C relevant accounts
will not be split into “Third Parties”, “Subsidiaries” and “JV/Associates”, instead all data is posted to
one account with optional Partner breakdown.

7. Therefore, for some accounts a partner breakdown is required although this account can contain both
I/C and third party transactions. For third party transactions, no partner needs to be selected upon
data entry. Please note in the diagrams that Balance Sheet is only shown for illustrative purposes.
Budget – Phasing
Profit & Loss
Break down the full year Budget on a straight-line basis. If a linear breakdown is not applicable, you
must inform your partner and reconcile the amounts for each month.
3. Mid Term Planning
(The flow chart from document by client is important if we can add “Overview
of GPS Architecture”.)
3.1 Process and Timeline
The MTP planning cycle is preceded by the Strategic Planning which is finalised usually in early July
and provides strategic direction along with a financial projection for the next five years. Based on the
Strategic Planning, Top-Down Targets are derived by means of a financial model and communicated
as the starting point of the MTP process.
3.2 Central Planning Assumptions
The central planning assumptions are distributed (July).
The central planning assumptions include:
- Real GDP Growth
- IP Growth
- CPI
- PPI
- FX Rates
- Interest Rates (Financing )
Please note that just one average FX rate will be provided to cover FC3 and the MTP 2016-2019.
4. Course Summary
At the completion of this course now you are able to:

8.  Identify the effective coordination between planning and forecasting by reducing complexity.
 Direct the planning process in Strategic direction.
 Compare FC, Budget and MTP with Actuals.
 Get the clear understanding about roles and responsibilities of different planning units.
 Identify the assumptions based on which the different types of planning is based.
5. Assessment
1. Which hierarchy is the base for planning events in the planning hierarchy?
a. Horizontal hierarchy
b. Mid term planning.
c. Vertical hierarchy.
d. Lift IFRS actual hierarchy.
Ans: d.
2. What is the objective of Global Planning Solutions (GPS)?
a. To simply planning and forecasting activities.
b. To generate solutions for planning processes.
c. To control the deviation in the planning processes.
d. To provide base hierarchy for planning events.
Ans: a.
3. What is included in Financial Planning?
a. Profit and loss Account
b. Only cash flow statement.
c. Both P/L and C/F.
d. Funds flow statement.
Ans: c.
4. Which planning is preceded by the Strategic Planning?
a. Long term planning.
b. Mid term planning.
c. Short term planning.

9. d. Systematic planning.
Ans: b.
5. Which rate will be provided to cover FC3 and MTP 2016-2019?
a. Averaged FX rate.
b. Current rate.
c. Budget rate.
d. Local currency rate.
Ans: a.