Consistent with the wave of recovery revealed by fellow Tier 1 players, The Linde Group has capitalised on the general economic upturn and achieved significant sales growth in Q2 2010.
Continuing the positive trend seen in Q1, Linde revealed significant growth in sales and operating profit in the first half of 2010, with group sales rising 11.5% to €6.10bn.
Further still, the group’s outlook for 2010 is reaffirmed – with growth in sales expected, operating profit increasing at a faster rate than sales, and group operating profit expected to exceed the record levels of 2008.
$quot;The upward trend is continuing. In the course of the second quarter, we have increasingly seen a rise in demand worldwide,$quot; said Professor Dr Wolfgang Reitzle, CEO of Linde AG.
$quot;Once again we have improved our profitability and we look with confidence to the months ahead. We reaffirm our objective, which is to reach a higher level of group sales and group operating profit in the 2010 financial year than in 2009. We are well on the way to achieving a faster rate of growth in group operating profit than in group sales and exceeding the group operating profit of record year 2008.”
In the six months to 30th June 2010, Linde’s group sales rose 11.5% to €6.104bn compared to 2009 sales of €5.476bn. After adjusting for exchange rate effects, the increase in sales was 5.8%, Linde explained.
Linde achieved a 26.4% improvement in group operating profit to €1.396bn, compared with 2009 operating profit €1.104bn. The growth in operating profit again outpaced the increase in sales, as operating margin rose 22.9%.
Earnings before taxes on income (EBT) reached €646m, a significant 77% improvement on the figure for the six months to 30th June 2009 of €365m. Earnings after tax rose in the first half of the year by 76.3% to €483m.
In terms of Linde’s Gases Division,
the company notes that the market recovery in the international gases industry gathered pace in the second quarter of 2010 as a result of the improvement in the general economic situation. Linde benefited from this positive trend, given the group's global footprint and strong position in emerging markets in particular.
Linde achieved a 13.4% increase in sales in the Gases Division in the first half of 2010, reaching €4.931bn (2009: €4.350bn). Business trends from quarter to quarter, Linde notes, confirm that the recovery in the general economy is stabilising. After achieving growth of 3.9% on a comparable basis in the first quarter of 2010, the company's gases business saw a 7.1% increase in sales in the second quarter of 2010.
The business trends in the operating segments of the Gases Division reflect regional variations in the pace of economic recovery; in the second quarter of 2010, the highest growth rates were to be seen in Asia, especially in the Greater China region. In the more mature markets, such as the US and Western Europe, demand also continued to rise – however, the upturn in those regions is proceeding at a relatively modest pace.
In the first half of 2010, sales in the on-site business, where Linde supplies industrial gases from plants situated directly on the customer's site, increased on a comparable basis by 11.8% to €1.182bn. In its bulk business, Linde achieved a 7.6% rise in sales on a comparable basis to €1.203bn, while the cylinder gases business recovered during the second quarter and Linde was able to increase sales in the six months to 30th June on a comparable basis by 1.7% to €1.999bn.
The Healthcare or medical gases product area continued its steady progress in the first six months of 2010, achieving 3.2% growth in sales on a comparable basis, to reach €547m
Gases Division – Outlook
Going forward, the liquefied and cylinder gases business ‘should benefit from the forecasted general economic recovery’ according to the group.
In the Healthcare product area, Linde expects to continue to deliver steady growth.
Against this background and given its good business performance in the first six months of the year, Linde continues to assume that it will achieve an increase in sales and earnings in the Gases Division in the full year 2010.
The group still expects to exceed the record operating profit of €2.417bn achieved in 2008.