DGAP-News: Linde AG / Key word(s): Final Results
Linde AG: Linde increases revenue and earnings again and raises its

17.03.2014 / 07:30


Press Release

Linde increases revenue and earnings again and raises its dividend

  - 2013 financial year: 

      - Group revenue up 5.2 percent to EUR 16.655 bn

      - Group operating profit  up 7.6 percent to EUR 3.966 bn

      - Operating cash flow increases by 18.0 percent to EUR 3.144 bn

      - 11.1 percent rise in proposed dividend to EUR 3.00 per share

  - Group outlook for 2014 after adjusting for exchange rate effects:
    Solid revenue growth and a moderate improvement in operating profit

Munich, 17 March 2014 - The technology company The Linde Group continued to
give a steady business performance in the 2013 financial year, again
achieving increases in Group revenue and Group operating profit. The
operations in the Healthcare product area acquired in the course of 2012
and positive trends in the engineering business made a particular
contribution here.

"We have been able to hold our own pretty well, although conditions have
been unfavourable and exchange rate effects have had an adverse impact on
our growth especially in the second half of the year," said Professor Dr
Wolfgang Reitzle, Chief Executive Officer of Linde AG. "Even in this
environment, we have succeeded in preserving the high profitability of the
Group. This has allowed us to maintain our dividend policy which is geared
towards continuity," explained Reitzle. "The Executive Board and
Supervisory Board will propose a resolution at the Annual General Meeting
that a dividend of EUR 3.00 per share be paid." This is an increase of 11.1
percent compared with the prior-year dividend of EUR 2.70.

With its robust business model based on sustainability and its
well-balanced global position, Linde believes that it is properly equipped
for the future. "After adjusting for exchange rate effects, we are
expecting solid growth in Group revenue in the 2014 financial year. We
anticipate that we will achieve a moderate improvement in Group operating
profit," declared CEO Reitzle.

In the 2016 financial year, Linde is still seeking to achieve Group
operating profit of at least EUR 5 bn and a return on capital employed
(reported ROCE) of around 13 percent (or adjusted ROCE of around 14
percent). These medium-term targets were set at the end of 2012 based on
the assumption that there would not be any significant shifts in exchange
rates compared with the rates prevailing at that time. However, if the
unfavourable exchange rates which applied at the end of 2013 were to
continue to apply over the coming years, this would reduce Group operating
profit in 2016 by around EUR 400 m and might also have an adverse impact on
return on capital employed.

In the 2013 financial year, Group revenue grew by 5.2 percent to EUR 16.655
bn (2012: EUR 15.833 bn). Exchange rate effects increasingly acted as a
brake on revenue trends during the reporting period. After adjusting for
these effects (which equate to revenue of EUR 656 m), the increase in
revenue was 9.7 percent. US homecare company Lincare, acquired by Linde in
August 2012, contributed EUR 1.563 bn to Group revenue.

Linde was able to reinforce its profitability at a high level and increased
its Group operating profit in the 2013 financial year by 7.6 percent to EUR
3.966 bn (2012: EUR 3.686 bn). The Group operating margin rose to 23.8
percent, higher than the prior-year figure of 23.3 percent. Adverse
currency fluctuations also had an impact on Group operating profit in 2013.
The effect of these distortions was to reduce earnings by EUR 148 m.
Without the distortions, Linde would have achieved a 12.1 percent increase
in Group operating profit.

Earnings before taxes on income (EBT) rose by 3.5 percent to EUR 1.794 bn
(2012: EUR 1.734 bn). Earnings after tax were EUR 1.430 bn (2012: EUR 1.341
bn). The amount attributable to Linde AG shareholders was EUR 1.317 bn
(2012: EUR 1.232 bn), giving earnings per share of EUR 7.10 (2012: EUR

Return on capital employed in the 2013 financial year was 9.7 percent
(2012: 10.2 percent). When comparing the figures for 2013 and 2012, it is
important to note that many large-scale projects in the on-site business
are still in the construction phase and were therefore not yet able to
contribute to earnings.

Operating cash flow increased by 18.0 percent to EUR 3.144 bn (2012: EUR
2.664 bn). This significant rise was due mainly to the improvement in
working capital.

Gases Division
Linde achieved revenue growth in the Gases Division in the 2013 financial
year of 5.7 percent to EUR 13.971 bn (2012: EUR 13.214 bn). The Lincare
business contributed revenue of EUR 1.563 bn to the total revenue of the
Gases Division. On a comparable basis (i.e. after adjusting for exchange
rate effects, changes in the price of natural gas and the impact on the
consolidation of the Lincare acquisition), the increase in revenue in the
Gases Division was 3.3 percent. Within the Gases Division, Lincare is
included in the Americas segment and the Healthcare product area. Linde's
Gases Division achieved a 7.9 percent increase in operating profit to EUR
3.846 bn (2012: EUR 3.566 bn). This gives an operating margin of 27.5
percent (2012: 27.0 percent).

Business trends in the individual segments in the Gases Division varied in
each case, depending on prevailing economic conditions.

In the EMEA segment (Europe, Middle East, Africa), revenue in the 2013
financial year of EUR 6.090 bn was a little higher than the figure for the
2012 financial year of EUR 6.061 bn. On a comparable basis, the growth in
revenue was 3.6 percent. Operating profit in the EMEA region improved
slightly by 2.1 percent to EUR 1.759 bn (2012: EUR 1.722 bn). The operating
margin rose to 28.9 percent (2012: 28.4 percent). The Continental European
homecare operations acquired by Linde at the end of April 2012 from Air
Products were a contributory factor in the strengthening of the business in
the EMEA region.

Business trends in the EMEA segment were adversely affected by the
continuation of unfavourable economic conditions in the eurozone. Demand
here in the liquefied gases and cylinder gas product areas was
correspondingly modest. The on-site business, on the other hand, saw
positive trends, boosted by the start-up of new plants. The market
environment in Eastern Europe was characterised by a downturn in economic
activity in 2013, whereas the economy in the Middle East remained
relatively robust.

In the Asia/Pacific segment, Linde generated revenue in the 2013 financial
year of EUR 3.767 bn, a figure which was not quite as high as the figure of
EUR 3.860 bn achieved in 2012. This was mainly as a result of unfavourable
exchange rate effects. On a comparable basis, the Group achieved an
increase in revenue in this segment of 4.1 percent. Business performance
was adversely affected in particular by the weaker economic environment in
manufacturing and in the mining industry in the South Pacific region.

Operating profit in the Asia/Pacific segment in 2013 of EUR 1.005 bn was
slightly higher than the figure for 2012 of EUR 996 m. The operating margin
therefore increased to 26.7 percent (2012: 25.8 percent).

Within the Asia/Pacific segment, the most positive trends were to be seen
in the business in South & East Asia, where Linde achieved volume increases
in all product areas. The Group also generated revenue growth in the
Greater China region, whereas the market in the South Pacific region was
characterised by declining volumes.

In the Americas segment, revenue in the 2013 financial year grew by 24.7
percent to EUR 4.231 bn (2012: EUR 3.394 bn). This significant increase was
due above all to the contribution made by US homecare company Lincare.
Lincare operates solely in North America and in the 2013 financial year
contributed EUR 1.563 bn to the total revenue of the Americas segment. On a
comparable basis, the increase in revenue was 2.4 percent. This is in line
with economic trends in the region. Operating profit rose by 27.6 percent
to EUR 1.082 bn (2012: EUR 848 m), mainly as a result of the Lincare
business. The operating margin was 25.6 percent, which was higher than the
figure for 2012 of 25.0 percent.

Within the Gases Division, revenue in the Healthcare product area grew 48.2
percent in the 2013 financial year to EUR 3.015 bn (2012: EUR 2.035 bn)
following the acquisitions made by the Group in the course of 2012. After
adjusting for the effect of the Lincare acquisition on the consolidation
and for exchange rate effects, the increase in revenue in the Healthcare
business was 4.8 percent.

In the cylinder gas product area, revenue was EUR 4.050 bn. On a comparable
basis, this was 1.0 percent above the prior-year figure of EUR 4.009 bn. In
the liquefied gases business, revenue increased on a comparable basis by
2.4 percent to EUR 3.328 bn (2012: EUR 3.249 bn). In the on-site business
(where Linde supplies gases on site to major customers), revenue rose on a
comparable basis by 5.6 percent to EUR 3.578 bn (2012: EUR 3.389 bn).
Growth in this product area was adversely affected by the reversal of a
contract to purchase air separation plants which had been transferred to
Linde in 2012 by a steel company in the Greater China region. If an
adjustment is made for this, the increase in revenue in the on-site
business would have been 6.2 percent.

Gases Division - Outlook
Recent economic forecasts indicate that the global gases market will grow
at a slightly faster pace in 2014 than was the case in 2013. Linde remains
committed to its original target in the gases business of outperforming the
market and continuing to increase productivity.

In its on-site business, Linde has a healthy project pipeline which will
make a contribution to revenue and earnings in the 2014 financial year and
an even more significant contribution to revenue and earnings in subsequent
years. The Group is forecasting that its liquefied gases and cylinder gas
product areas will perform in line with macroeconomic trends. In the
Healthcare product area, a steady business performance is expected.

Against this background, Linde expects to achieve (after adjusting for
exchange rate effects) a moderate increase in revenue and operating profit
in the Gases Division in 2014 when compared with the 2013 financial year.

Engineering Division
2013 was a successful year for Linde's international engineering project
business. Revenue in the Engineering Division increased by 12.4 percent to
EUR 2.879 bn (2012: EUR 2.561 bn). Operating profit improved by 2.2 percent
to EUR 319 m (2012: EUR 312 m). At 11.1 percent, the operating margin again
reached a level well above the industry average (2012: 12.2 percent).

There was a strong upward trend in order intake. This rose to EUR 3.911 bn
in the 2013 financial year, 38.9 percent above the figure for 2012 of EUR
2.815 bn. Orders from the Group's Gases Division made a substantial
contribution to this significant increase.

Order intake was characterised not only by major projects in the four key
product lines (olefin plants, natural gas plants, air separation plants,
hydrogen and synthesis gas plants), but also by a number of small and
medium-sized new orders. More than a third of new orders came from the
Asia/Pacific region, while around 30 percent came from North America.
Around a quarter of new orders were from Europe. In North America, projects
for the efficient exploitation of shale gas reserves again had an impact on
Linde's business.

As a result of good order trends, the order backlog in the Engineering
Division continued to grow. At 31 December 2013, it stood at EUR 4.504 bn
(2012: EUR 3.700 bn).

Engineering Division - Outlook
A relatively stable market environment is expected in the international
large-scale plant construction business in 2014. Linde is well positioned
in the olefin plant, natural gas plant, air separation plant and hydrogen
and synthesis gas plant product areas and also has a high order backlog.

Linde expects to achieve solid revenue growth in the Engineering Division
in 2014 compared with 2013. It anticipates an operating margin of around 10

Note: The 2013 Annual Report of The Linde Group is available on the
Internet at:
To coincide with the publication of the financial statements, a webcast for
analysts will take place today at 2pm German time in English with Professor
Dr Wolfgang Reitzle, CEO of Linde AG, and Georg Denoke, CFO of Linde AG.
Journalists will have the opportunity to watch the webcast by following
this link:


 In the 2013 financial year, The Linde Group generated revenue of EUR
16.655 bn, making it the largest gases and engineering company in the world
with approximately 63,500 employees working in more than 100 countries
worldwide. The strategy of The Linde Group is geared towards long-term
profitable growth and focuses on the expansion of its international
business with forward-looking products and services. Linde acts responsibly
towards its shareholders, business partners, employees, society and the
environment - in every one of its business areas, regions and locations
across the globe. The company is committed to technologies and products
that unite the goals of customer value and sustainable development.

For more information, see The Linde Group online at www.linde.com

Further information:

Media                                               Investor Relations
Uwe Wolfinger                                       Dr Dominik Heger
Phone +49.89.35757-1320                             Phone +49.89.35757-1334

Matthias Dachwald                                   Lisa Tilmann
Phone +49.89.35757-1333                             Phone +49.89.35757-1328


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Language:    English                                                    
Company:     Linde AG                                                   
             Klosterhofstraße 1                                         
             80331 München                                              
Phone:       +49.89.35757-01                                            
Fax:         +49.89.35757-1075                                          
E-mail:      info@linde.com                                             
Internet:    www.linde.de                                               
ISIN:        DE0006483001                                               
WKN:         648300                                                     
Indices:     DAX                                                        
Listed:      Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime  
             Standard), Hamburg, München, Stuttgart; Freiverkehr in     
             Hannover; Terminbörse EUREX; SIX                           
End of News    DGAP News-Service  
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