Linde plc today reported its fourth-quarter income from continuing operations of $507m and diluted earnings per share of $0.94.
Excluding Linde AG purchase accounting impacts and other charges, adjusted pro forma income from continuing operations was $1.02bn, up 22% versus prior year and down 3% sequentially.
Linde’s sales for the fourth quarter were $7.08bn. Pro forma sales were $7.07bn, up 3% versus prior year excluding negative currency. Volume increased 1% while price improved 2% and was attained across all geographic segments.
Fourth-quarter operating profit was $655mi. Adjusted pro forma operating profit of $1.34bn was 17% above prior year or 19% when excluding unfavourable currency.
Fourth-quarter operating cash flow of $2.17bn increased $302m versus the third quarter, primarily driven by improved working capital. During the quarter, the company invested $1.02bn in capital expenditures and returned $1.18bn to shareholders through dividends and stock repurchases, net of issuance.
For full-year 2019, reported sales were $28.23bn and adjusted pro forma sales were $28,16bn, flat versus 2018. Underlying sales grew 4% with volume and price each increasing 2%. Volume growth was split between base business and project start-ups while price increased across all geographic segments. Operating profit was $2.93bn and adjusted pro forma operating profit was $5.27bn, up 14% excluding negative currency effects.
In 2019, Linde generated strong operating cash flow of $6.12bn which included more than $800m of merger-related cash outflows. The company invested $3.7bn in capital expenditures and paid dividends of $1.9bn. In addition, Linde repurchased $2.6bn of stock, net of issuances, and executed the squeeze-out of the German minority shareholders which totalled $3.2bn.
Commenting on the financial results, CEO Steve Angel said, “For the fourth consecutive quarter, Linde delivered double-digit EPS growth, capping off its first successful year as a new organisation.”
“I am pleased to see how well the team integrated two high-quality companies in a relatively short period of time while delivering on our commitments to shareholders.”
“For the full year, EPS grew 19%, ROC closed at 11.6% and we returned approximately $8bn to shareholders. I want to thank our employees around the world for their exemplary work in achieving these strong results.”
Angel continued, “Looking ahead to 2020, we anticipate continued softening of macro-economic conditions, but project double-digit EPS growth from our industry-leading backlog and continued efforts to optimize the business. Furthermore, our mission statement is ‘making our world more productive’ and to that end we are setting new sustainability goals, including a 35% reduction in greenhouse gas emissions intensity by 2028.”
Americas sales of $2.74bn were 2% higher versus prior-year quarter and down 1% sequentially. Compared to fourth-quarter 2018, price increased 2% and volume grew 1% led mainly by the resilient end markets of healthcare, food and beverage. Operating profit of $676m was 24.7% of sales, up 200 basis points versus prior-year quarter.
APAC (Asia Pacific) sales of $1.4bn were 3% below prior year and decreased 4% sequentially. Excluding negative currency and cost pass-through, sales versus prior year were flat. Price increased 2% but was offset by negative volumes driven by weaker economic conditions in South Pacific, lower electronics end market activity and higher sale of equipment in the prior year. Operating profit of $299m was 21.3% of sales, up 430 basis points versus prior-year quarter.
EMEA (Europe, Middle East & Africa) sales of $1.65bn were down 3% versus prior year and up 1% sequentially. Excluding unfavourable currency and cost pass-through, sales increased 1% versus prior year. Pricing was 3% higher but was partially offset by negative volumes primarily due to weaker manufacturing activity. Operating profit of $353m was 21.3% of sales, up 390 basis points versus prior-year quarter.
Linde Engineering sales were $770m and operating profit was $93m or 12.1% of sales. Operating profit grew 21% versus prior year due primarily to strong project execution, productivity and better cost absorption.