Financial Highlights
- Sales $7.2 billion, ex. FX +4% versus prior year and +5% sequentially
- Operating profit margin 9.3%, adjusted pro forma operating profit margin 18.4%
- EPS $0.94, adjusted pro forma EPS $1.83
- Raised full-year adjusted pro forma EPS guidance to $6.95 - $7.18*
- Increased sale of gas backlog to $4.7 billion
GUILDFORD, UK / ACCESSWIRE / August 5, 2019 / Linde plc (NYSE:LIN)(XETRA:LIN) today reported second-quarter income from continuing operations of $513 million and diluted earnings per share of $0.94. Excluding Linde AG purchase accounting impacts and other charges, adjusted pro forma income from continuing operations was $1,000 million, up 11% versus prior year adjusted pro forma and 8% sequentially. Adjusted pro forma earnings per share was $1.83, 12% above the prior year and 8% sequentially.
Linde's sales for the second quarter were $7,204 million. Pro forma sales were $7,179 million, in line with the prior year. Excluding unfavorable currency translation effects, sales increased 4% driven by volume and price each growing 2%. Volume growth was evenly split between base business and project startups while price improved across all geographic segments. Sales sequentially increased 4% driven by 4% higher volumes and 1% price, partially offset by 1% currency headwind.
Second quarter reported operating profit of $669 million was 3% below the prior-year quarter, primarily due to the impact of purchase accounting. On an adjusted pro forma basis, operating profit of $1,319 million was 6% above prior year or 10% when excluding unfavorable currency.
During the second quarter, the company paid $474 million of dividends and repurchased $498 million of stock, net of issuance.
Commenting on the financial results, Chief Executive Officer Steve Angel said, "Linde employees delivered strong financial results by improving operating profit margins to drive 12% EPS growth and securing a record project backlog of $4.7 billion. As we look towards the remainder of the year, I'm confident we will deliver on our commitments to create shareholder value irrespective of the economic environment."
For full-year 2019, Linde expects adjusted pro forma diluted earnings per share to be in the range of $6.95 to $7.18 which represents an increase of 12% to 16% versus prior year. This range includes an estimated currency headwind of 3%.
Following is additional detail on second quarter 2019 pro forma results for each segment.
Americas sales of $2,779 million were 4% higher versus prior-year quarter and 3% higher sequentially. Compared with the first quarter of 2019, volume and price increased 3% and 1% respectively, while currency was unfavorable by 1%. Operating profit of $646 million was 23.2% of sales.
APAC (Asia Pacific) sales of $1,488 million decreased 2% from prior year but increased 4% sequentially. Excluding negative currency, sales grew 4% versus the prior year and 5% sequentially. Sequentially, price improved 1% and volumes increased 4% primarily driven by seasonal effects in Australia and China. Operating profit of $304 million was 20.4% of sales.
EMEA (Europe, Middle East & Africa) sales of $1,673 million were up 1% versus both the prior year and sequentially excluding unfavorable currency. Compared with the first quarter of 2019, volume increased 1% and price was flat. Operating profit of $332 million was 19.8% of sales.
Linde Engineering sales were $752 million and operating profit was $99 million or 13.2% of sales. Operating profit grew 27% versus prior year and sequentially due to strong project execution and cost management.
A teleconference on Linde's second-quarter results is being held this morning, August 5, 2019 at 9:00 am Eastern Time. The US Toll-Free Dial-In Number is 1 855 758 5442 and the access code is 7264748. The call is also available as a webcast live and on-demand at www.linde.com/investors. Materials to be used in the teleconference are also available on the website.
About Linde
Linde is a leading industrial gases and engineering company with 2018 pro forma sales of USD 28 billion (EUR 24 billion). The company employs approximately 80,000 people globally and serves customers in more than 100 countries worldwide. Linde delivers innovative and sustainable solutions to its customers and creates long-term value for all stakeholders. The company is making our world more productive by providing products, technologies and services that help customers improve their economic and environmental performance in a connected world.
For more information about the company, please visit www.linde.com
Proforma sales and adjusted operating profit and earnings per share are non-GAAP measures prepared on a basis consistent with Article 11 and includes certain non-GAAP adjustments. See pages 9 to 15 for reconciliations.
See the attachments (Earnings Release tables: http://n.eqs.com/c/fncls.ssp?u=XPOOPCLPEY) for a summary of pro forma, adjusted pro forma and non-GAAP reconciliations and calculations. Adjusted amounts, EBITDA, free cash flow and net debt are non-GAAP measures.
*Note: We are providing adjusted pro forma earnings per share ("EPS") guidance for 2019. 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. At this time, we cannot provide a reconciliation of the differences between the non-GAAP adjusted pro forma EPS guidance and the corresponding GAAP EPS measure for 2019 without unreasonable effort such as (1) the impact of anticipated asset divestitures and (2) purchase accounting adjustments related to the business combination between Praxair and Linde AG. As such, these variables result in an EPS GAAP range that we believe is too large and variable to be meaningful.
Attachments: Summary pro forma and adjusted pro forma reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: 2019 and 2018 pro forma income statement information and non-GAAP Measures.
Forward-looking Statements
This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. They are based on management's reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the ability to successfully integrate the Praxair and Linde AG businesses; regulatory or other limitations and requirements imposed as a result of the business combination of Praxair and Linde AG that could reduce anticipated benefits of the transaction; the risk that Linde plc may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates, including the impact of the U.S. Tax Cuts and Jobs Act of 2017; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause actual future results or circumstances to differ materially from GAAP, IFRS or adjusted projections, estimates or other forward-looking statements.
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, 2018 filed with the SEC on March 18, 2019 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.
SOURCE: Linde plc
