DGAP-News: Linde AG / Key word(s): Half Year Results
Linde AG: Positive exchange rate effects have a beneficial impact on
Linde's revenue and earnings in the first half of 2015
29.07.2015 / 07:30
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Press release
Positive exchange rate effects have a beneficial impact on Linde's revenue
and earnings in the first half of 2015
- Business performance gains some momentum in the second quarter
- Very positive trend in operating cash flow continues
- Group revenue forecast adjusted as a result of persistent weak demand
in the plant construction sector
Munich, 29 July 2015 - The technology company The Linde Group achieved a
10.0 percent increase in revenue on the basis of reported figures in the
first six months of 2015 to EUR 9.036 bn, compared with revenue of EUR
8.212 bn in the first six months of 2014. After adjusting for exchange rate
effects, revenue was similar to the level achieved in the first half of
2014. Operating profit improved by 11.0 percent to EUR 2.104 bn (2014: EUR
1.896 bn). After adjusting for exchange rate effects, operating profit rose
by 0.4 percent. The Group operating margin increased from 23.1 percent in
the first half of 2014 to 23.3 percent in the first half of 2015. The
exceptionally positive trend in operating cash flow continued.
After a modest start to the financial year in the first three months of
2015, Linde once again achieved increases in both Group revenue and Group
operating profit in the second quarter after adjusting for exchange rate
effects. For the three months ended 30 June 2015, Group revenue rose by 0.7
percent after adjusting for exchange rate effects, while Group operating
profit rose by 1.8 percent. In both cases, the comparison is with the
figures for the second quarter of 2014.
"In the course of the second quarter, Linde's business performance gained
some momentum. The Gases Division, which is by far our largest and most
important line of business, has continued to grow," said Dr Wolfgang
Büchele, Chief Executive Officer of Linde AG. "We have revised up our
forecast for the Gases Division mainly as a result of exchange rate
effects. In plant construction, on the other hand, we are feeling the
impact of a worldwide reluctance to invest due to the low price of oil," he
continued. "Given that weak demand is expected to persist in the second
half of 2015 and that sustained growth momentum is not anticipated, the
Executive Board has now revised down the revenue forecast for the
Engineering Division to between EUR 2.5 bn and EUR 2.7 bn," explained
Büchele as he presented the figures.
In the first six months of 2015, earnings per share before restructuring
costs of EUR 138 m (a non-recurring item) was EUR 3.65 (2014: EUR 3.36).
Earnings per share was EUR 3.12 (2014: EUR 3.36).
The very positive trend in operating cash flow continued. It rose by 54.9
percent to EUR 1.583 bn when compared with the figure for the prior-year
period of EUR 1.022 bn. The main factors contributing to this significant
increase were the good operating profit generated by the Group and more
efficient working capital management.
Gases Division: Growth improves in the second quarter
During the reporting period, Linde continued to achieve growth in revenue
in the Gases Division. Whereas revenue growth in the first quarter of 2015
was just 1.0 percent on a comparable basis (after adjusting for exchange
rate effects and changes in the price of natural gas), Linde was able to
achieve revenue growth of 1.9 percent in the first half of 2015. One of the
reasons for this increase was the contribution to revenue of EUR 36 m made
by an LPG business in Australia acquired by Linde in February 2015. On the
basis of reported figures, revenue in the first half of 2015 rose by 10.7
percent to EUR 7.554 bn (2014: EUR 6.825 bn). Revenue was adversely
affected not only by the relatively weak macro-economic environment, but
also by current low energy costs and the expiry of on-site contracts.
Operating profit rose by 12.2 percent to EUR 2.091 bn (2014: EUR 1.863 bn).
The operating margin in the first six months of 2015 rose to 27.7 percent
(2014: 27.3 percent).
In the Americas segment, Linde was able to achieve a significant increase
in revenue in the first half of 2015 of 21.8 percent to EUR 2.552 bn (2014:
EUR 2.095 bn). On a comparable basis, revenue rose by 7.0 percent. When
compared with the prior-year period, operating profit increased by 28.1
percent to EUR 638 m (2014: EUR 498 m). The operating margin rose to 25.0
percent (2014: 23.8 percent).
In the Asia/Pacific segment, Linde generated revenue in the six months to
30 June 2015 of EUR 2.086 bn. This was 14.9 percent more than the figure
for the first half of 2014 of EUR 1.816 bn. On a comparable basis, revenue
rose by 1.4 percent. This growth was mainly underpinned by the acquisition
of an LPG business in Australia. Operating profit rose by 13.0 percent to
EUR 538 m (2014: EUR 476 m), giving an operating margin of 25.8 percent
(2014: 26.2 percent). Macroeconomic trends in China remain solid, but the
situation in Australia has continued to deteriorate.
In the EMEA segment (Europe, Middle East, Africa), Linde generated revenue
of EUR 3.005 bn in the first six months of 2015, which was slightly higher
than the figure achieved in the first half of 2014 of EUR 2.978 bn. On a
comparable basis, revenue fell by 1.5 percent. The expiry of a hydrogen
supply contract in Italy had a substantial adverse impact on revenue. At
the end of 2014, the plant was transferred to the customer and since that
date the plant has ceased to make a contribution to revenue. Operating
profit was EUR 915 m, which was 2.9 percent higher than the figure for the
first half of 2014 of EUR 889 m. The operating margin increased to 30.4
percent (2014: 29.9 percent).
Forecast: Linde has revised up its revenue forecast in the Gases Division
from between EUR 14.9 bn and EUR 15.4 bn to between EUR 15.1 bn and EUR
15.5 bn mainly as a result of current trends in exchange rates. Linde is
now seeking to achieve operating profit in the Gases Division of between
EUR 4.1 bn and EUR 4.3 bn, compared with its previous forecast for
operating profit of between EUR 4.05 bn and EUR 4.25 bn. In each case,
achievement of the targets is dependent on ongoing trends in industrial
production and on exchange rates.
Order backlog in the Engineering Division remains high
The order backlog in the Engineering Division at 30 June 2015 remained high
at EUR 4.191 bn (31 December 2014: EUR 4.672 bn).
As a result of prevailing mood of restraint worldwide towards investment in
plant construction, order intake in the six months to 30 June 2015 was EUR
724 m (2014: EUR 1.058 bn). The order intake in the first half of 2015 was
evenly spread across the Asia/Pacific, Europe and North America regions,
with a third of orders in each region. Around half of new orders are
related to natural gas, hydrogen and synthesis gas plants.
Revenue in the Engineering Division fell in the first half of 2015 by 4.7
percent to EUR 1.351 bn (2014: EUR 1.418 bn). Operating profit was EUR 114
m, which was not as high as the figure for the prior-year period of EUR 141
m. The operating margin in the first six months of 2015 was 8.4 percent
(2014: 9.9 percent). The operating margin continues to be above the
industry average and matches the target Linde set itself for the current
financial year.
Forecast: Order intake in Linde's Engineering Division in the first half of
2015 was significantly lower than expected as a result of the persistently
low price of oil and the resultant faltering demand in plant construction.
The revenue forecast in the Engineering Division for the 2015 financial
year has therefore been revised down. Linde is now seeking to generate
revenue of between EUR 2.5 bn and EUR 2.7 bn, compared with its previous
forecast of between EUR 3.0 bn and EUR 3.3 bn. Linde continues to expect to
achieve an operating margin of around 8 percent.
Outlook
"Continuing weak demand will remain the main challenge for us in the second
half of 2015. This makes it all the more important now that we continue to
act to strengthen our competitive situation," said Büchele.
To coincide with the publication of the interim report, a webcast for
analysts will take place today at 2pm German time in English with Georg
Denoke, CFO of Linde AG. Journalists will have the opportunity to watch the
webcast by following this link:
http://event.mescdn.com/linde/webcast-20150729
In the 2014 financial year, The Linde Group generated revenue of EUR 17.047
bn, making it the largest gases and engineering company in the world with
approximately 65,500 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:
<pre>
Media Relations Investor Relations
Ulrich Porwollik Dr Dominik Heger
Phone +49.89.35757-1311 Phone +49.89.35757-1334
Matthias Dachwald Bernard Wang
Phone +49.89.35757-1333 Phone +49.89.35757-1328
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Language: English
Company: Linde AG
KlosterhofstraÃe 1
80331 München
Germany
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: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime
Standard), Hamburg, Munich, Stuttgart; Regulated
Unofficial Market in Hanover; Terminbörse EUREX; SIX
End of News DGAP News-Service
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381803 29.07.2015
DGAP-News: Linde AG: Positive exchange rate effects have a beneficial impact on Linde's revenue and earnings in the first half of 2015
| Source: EQS Group AG