The Linde Group has released its 2015 results, demonstrating a continued solid performance as it once again achieved increases in both group revenue and operating profit.

Despite the headwinds of a ‘difficult market environment’ Linde recorded a group revenue rise of 5.3% to €17.9bn and a similar increase in operating profit, up 5.4% to €4.1bn

The company noted that positive exchange rate effects had an impact on revenue and earnings, while the medical gases and healthcare services business were also singled out as supporting the group’s business performance in particular.

Revenue in the gases division rose by 8.5% in the 2015 financial year to €15.1bn (2014: €13.9bn); after adjustments to reflect exchange rate effects and changes in the price of natural gas, revenue increased by 2.1%. Operating profit in the Gases Division also rose 8.2%, to around €4.1bn (2014: €3.8bn), providing a healthy operating margin of 27.4%.

Dr. Wolfgang Büchele, CEO of Linde AG, commented, “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.”

“We have therefore been able to maintain our dividend policy which is geared towards continuity,” explained Büchele, adding, “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.”

Stable earnings power

Positive exchange rate effects had an impact on Linde’s revenue trend (+5.3%) in 2015, particularly in the first six months of the year. After adjusting for these effects, group revenue was actually 2.3% 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, the company explained. In stark contrast, revenue in the Gases Division rose 2.1% after adjusting for exchange rate effects and changes in the price of natural gas. A strong healthcare business was also cited as supporting revenue growth in the Gases Division.

Of further note is that Linde was able to maintain its stable earnings power in the 2015 financial year and achieve a 5.4% increase in group operating profit to €4.1bn (2014: €3.9bn). After exchange rate adjustments, however, group operating profit was down by 2.4%.

Group operating margin was stable at 23%, the same as in 2014.

Profit for the year was €1.2bn (2014: €1.1bn), while profit attributable to Linde AG shareholders was €1.1bn (2014: €1.1bn) and return on capital employed (ROCE) was also stable at 9.4% (2014: 9.5%). Operating cash flow rose by 19.7% to €3.5bn (2014: €3bn), due mainly to the good operating profit.

Varying business trends

Varying business trends were to be seen in the individual segments in Linde’s Gases Division in 2015, depending on the prevailing economic conditions.

In the Americas segment, revenue increased by 20.1% to €5.1bn (2014: €4.3bn), a positive trend 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%.

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.

Africa financial analysis

In the EMEA segment (Europe, Middle East, Africa), revenue was €6bn in the 2015 financial year, slightly higher than the figure of €5.9bn achieved in the previous year. On a comparable basis, revenue dipped by 1.2%. 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. 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% in the 2015 financial year to €4.1bn, though on a comparable basis, revenue growth was just 1%. 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.

Euro currency financial appreciation


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.

Against this backdrop, Linde is seeking to achieve revenue in the Gases Division in the 2016 financial year – after adjusting for exchange rate effects – of at least equal to and potentially up to 5% higher than the revenue achieved in the 2015 financial year.

For the Group as a whole, Linde is seeking to achieve an increase in revenue and operating profit of 4% after adjusting for exchange rate effects, although the challenging market environment could result in a decrease of up to 3%.