DGAP-News: Linde AG / Key word(s): Final Results
Linde AG: Linde successfully sustains its position in a challenging market
environment and again proposes an increase in dividend
10.03.2016 / 07:30
The issuer is solely responsible for the content of this announcement.
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Press release
Linde successfully sustains its position in a challenging market
environment and again proposes an increase in dividend
- 2015 financial year:
- Group revenue up 5.3 percent to EUR 17.944 bn
- Group operating profit increases by 5.4 percent to EUR 4.131 bn
- Revenue in the Gases Division up 8.5 percent to EUR 15.168 bn, an
increase of 2.1 percent after adjusting for exchange rate effects
and changes in the price of natural gas
- Operating cash flow rises by 8.8 percent to EUR 3.593 bn
- Positive exchange rate effects have an impact on revenue and earnings
- 9.5 percent increase in proposed dividend to EUR 3.45 per share
- Group outlook for 2016: Linde is seeking to achieve an increase in
Group revenue and Group operating profit of 4 percent after adjusting
for exchange rate effects, although the challenging market environment
could result in a decrease of up to 3 percent
Munich, 10 March 2016 - The technology company The Linde Group continued to
deliver a solid performance in the 2015 financial year, once again
achieving increases in both Group revenue and Group operating profit.
Positive exchange rate effects had an impact on revenue and earnings. The
medical gases and healthcare services business also supported the Group's
business performance.
"The difficult market environment and a weak economy presented us with a
number of challenges last year. Despite this headwind, we were able to
sustain our stable earnings power, achieve a solid result and generate
strong operating cash flow," said Dr Wolfgang Büchele, Chief Executive
Officer of Linde AG. "We have therefore been able to maintain our dividend
policy which is geared towards continuity," explained Büchele.
The Executive Board and Supervisory Board will propose a resolution at the
Annual General Meeting that a dividend of EUR 3.45 per share be paid. This
is an above-average increase of 9.5 percent compared with last year's
dividend of EUR 3.15.
"With our stable business model which is focused on sustainability, we
believe that we are well positioned for the future. What's more, last year
we launched numerous initiatives which will enable us to continue to
achieve success in a challenging market environment," said Büchele.
Stable earnings power maintained in the 2015 financial year
In the 2015 financial year, Group revenue rose by 5.3 percent to EUR 17.944
bn (2014: EUR 17.047 bn). Positive exchange rate effects had an impact on
the revenue trend, particularly in the first six months of the year. After
adjusting for these effects, Group revenue was 2.3 percent below the figure
for the prior year. This was due to a fall in revenue in the Engineering
Division from the record level achieved in 2014. Revenue in the Gases
Division, on the other hand, rose by 2.1 percent after adjusting for
exchange rate effects and changes in the price of natural gas.
Linde was able to maintain its stable earnings power and achieve a 5.4
percent increase in Group operating profit in the 2015 financial year to
EUR 4.131 bn (2014: EUR 3.920 bn). The Group operating margin was 23.0
percent, the same as in 2014. After exchange rate adjustments, Group
operating profit was down by 2.4 percent.
Profit for the year was EUR 1.252 bn (2014: EUR 1.162 bn). Profit
attributable to Linde AG shareholders was EUR 1.149 bn (2014: EUR 1.102
bn), resulting in an earnings per share of EUR 6.19 (2014: EUR 5.94).
In the 2015 financial year, return on capital employed (ROCE) was 9.4
percent (2014: 9.5 percent). Operating cash flow rose by 19.7 percent to
EUR 3.593 bn (2014: EUR 3.001 bn). This was due mainly to the good
operating profit. After adjusting for pension plan funding in Germany in
2014, the increase in operating cash flow in 2015 was 8.8 percent.
Strong Healthcare business supports revenue growth in the Gases Division
In the Gases Division, revenue rose by 8.5 percent in the 2015 financial
year to EUR 15.168 bn (2014: EUR 13.982 bn). After adjustments to reflect
exchange rate effects and changes in the price of natural gas, revenue
increased by 2.1 percent. Operating profit in the Gases Division rose by
8.2 percent to around EUR 4.151 bn (2014: EUR 3.835 bn). This gives an
operating margin of 27.4 percent (2014: 27.4 percent).
Varying business trends were to be seen in the individual segments in the
Gases Division, depending on prevailing economic conditions.
In the Americas segment, revenue increased by 20.1 percent to EUR 5.183 bn
(2014: EUR 4.314 bn). This positive trend was supported mainly by the
Lincare business and a growing number of patients requiring care in North
America. On a comparable basis, revenue rose by 7.7 percent. Operating
profit increased by 24.0 percent in the 2015 financial year to EUR 1.298 bn
(2014: EUR 1.047 bn). The operating margin rose to 25.0 percent (2014: 24.3
percent).
In North America, in addition to the expansion of its Healthcare business,
Linde also achieved growth in the market for liquefied and cylinder gases.
In South America, economic conditions in 2015 remained subdued. Despite the
difficult environment, slight growth was achieved in all product areas on a
comparable basis.
In the EMEA segment (Europe, Middle East, Africa), revenue was EUR 6.010 bn
in the 2015 financial year, slightly higher than the figure of EUR 5.980 bn
achieved in the previous year. On a comparable basis, revenue dipped by 1.2
percent. When comparing with the revenue generated in 2014, it should be
noted that at the end of 2014 Linde transferred a large hydrogen plant in
Italy to the customer upon expiry of the contract. Since then, no revenue
has been generated by that plant. Operating profit in the EMEA region rose
slightly by 0.7 percent to EUR 1.790 bn (2014: EUR 1.778 bn). The operating
margin was 29.8 percent (2014: 29.7 percent).
Business performance in the EMEA segment was adversely affected by the
continuing sluggish pace of economic growth in Europe and South Africa.
Demand in the liquefied gases and cylinder gas business fell as a result.
The on-site business, where Linde supplies gases on site to major
customers, saw declining volumes, particularly as a result of the expiry of
the contract in Italy mentioned above. In the Middle East and Eastern
Europe, Linde achieved revenue growth in the on-site product area. The
Healthcare business grew in almost all regions.
In the Asia/Pacific segment, revenue increased by 9.1 percent in the 2015
financial year to EUR 4.157 bn. On a comparable basis, revenue growth was
1.0 percent. Operating profit in the Asia/Pacific segment rose by 5.2
percent in 2015 to EUR 1.063 bn (2014: EUR 1.010 bn). At 25.6 percent, the
operating margin was lower than the figure for 2014 of 26.5 percent.
Performance in the Asia/Pacific segment varied according to the product
area. Linde achieved its main increases in revenue in this segment in the
on-site business in China and India. The liquefied gases business also
performed well, whereas revenue in the cylinder gas product area was down
on the prior year. In the South Pacific, the prevailing weak economic
environment in manufacturing and declining investment in the mining
industry had an adverse impact on growth. Linde is continuing to apply the
structural and organisational measures it had introduced in this region in
order to improve profitability.
High order backlog once again in the Engineering Division
Revenue and earnings trends in Linde's international plant construction
business reflected the progress made on individual projects. Moreover,
revenue in the 2015 financial year was affected particularly by low order
intake in the first six months of the year. In the Engineering Division,
revenue fell in 2015 by 16.5 percent to EUR 2.594 bn, compared with the
record figure of EUR 3.106 bn achieved in 2014. Operating profit was EUR
216 m (2014: EUR 300 m). The operating margin was 8.3 percent, still above
the industry average and in line with the target of around 8 percent that
Linde had set itself for the 2015 financial year.
As a result of current low oil prices and weaker demand in the plant
construction sector, order intake in the 2015 financial year was EUR 2.494
bn (2014: EUR 3.206 bn). Linde entered into a strategic partnership with
Gazprom at the end of 2015. Shortly afterwards, the Group announced the
first plant construction contract to result from this cooperation
agreement. Linde will be responsible for engineering and procurement for
one of the world's largest gas processing projects in eastern Russia. The
project includes plants for the extraction of ethane and liquefied gas
components and plants for the separation of nitrogen, as well as a helium
extraction plant. The order backlog remained high. At 31 December 2015, it
stood at EUR 4.541 bn (2014: EUR 4.672 bn).
Outlook
Linde expects the market environment to continue to be challenging in the
2016 financial year. Recent economic forecasts indicate that the global
gases market will grow at a similar rate in 2016 to that seen in 2015. In
contrast, the market environment in the international plant construction
business is likely to continue to be influenced by the low price of oil.
Against this backdrop, Linde is seeking to achieve revenue in the Gases
Division in the 2016 financial year after adjusting for exchange rate
effects which is at least equal to and may be up to 5 percent higher than
the revenue achieved in the 2015 financial year. The expected range for
revenue in the Engineering Division in 2016 is between EUR 2.0 bn and EUR
2.4 bn, below the figure achieved in 2015. For the Group as a whole, Linde
is seeking to achieve an increase in revenue and operating profit of 4
percent after adjusting for exchange rate effects, although the challenging
market environment could result in a decrease of up to 3 percent.
Note: The 2015 Annual Report of The Linde Group is available online at:
http://annual-report.linde.com/2015
To coincide with the publication of the financial statements, a webcast for
analysts will take place today at 2 p.m. German time in English with Dr
Wolfgang Büchele, CEO of Linde AG, and Georg Denoke, CFO of Linde AG.
Journalists will have the opportunity to watch the webcast by following
this link: http://event.mescdn.com/linde/results-conference-call-fy-2015
Information about sustainability at Linde can also be found in the
Corporate Responsibility Report:
Http://corporateresponsibility.linde.com/cr-report/2015
In the 2015 financial year, The Linde Group generated revenue of EUR 17.944
bn, making it one of the leading gases and engineering companies in the
world, with approximately 65,000 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
Matthias Dachwald Dr Dominik Heger
Phone +49.89.35757-1333 Phone +49.89.35757-1334
Bernard Wang
Phone +49.89.35757-1328
</pre>
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10.03.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Linde AG
Klosterhofstraße 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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443937 10.03.2016
DGAP-News: Linde AG: Linde successfully sustains its position in a challenging market environment and again proposes an increase in dividend
| Source: EQS Group AG