Linde’s second quarter (Q2) 2020 results demonstrate the resiliency of its integrated industrial gas supply model, says the company’s CEO Steve Angel.

“Despite volume reductions from the pandemic, EPS excluding currency increased 8%, operating margin expanded 230 basis points and operating cash flow grew 76% from prior-year levels,” Angel commented as Linde published the results this morning.

Linde reported Q2 2020 income from continuing operations of $458m. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was just over $1bn, up 1% versus prior year and flat sequentially.

Linde’s sales for the second quarter were $6.38bn, 5% below prior year excluding negative currency translation, cost pass-through and divestitures.

Price improved 2% and was attained across all geographic segments. Volume decreased 7% as growth from project start-ups and engineering was more than offset by the global macroeconomic slowdown as a result of the Covid-19 pandemic, Linde said.

Q2 operating profit was $591m. Adjusted operating profit of $1.32bn was flat versus prior year, or 4% higher, when excluding unfavourable currency translation effects, Linde reported.

Linde said adjusted operating margin of 20.7% expanded 230 basis points versus prior year primarily due to price and cost actions underpinned by stable fixed payment revenues.

Q2 operating cash flow of $1.76bn increased $759m, or 76%, over prior year, which Linde said was primarily driven by higher cash earnings, lower merger-related cost and improved working capital.

During the quarter, the company invested $783m in capital expenditures and returned $506m to shareholders through dividends.


Americas sales of $2.42bn were 13% below prior-year quarter as 2% higher pricing was more than offset by 9% volume decline led mainly by manufacturing and metals end markets.

Operating profit of $622m was 25.7% of sales, up 250 basis points versus prior year.

APAC (Asia Pacific) sales of $1.3bn were 13% below prior year. Price increased 1% versus prior year but was more than offset by negative 9% volumes driven by lower demand in the manufacturing end market and a prior-year sale of equipment.

Operating profit of $294m was 22.7% of sales, up 230 basis points versus prior year.

EMEA (Europe, Middle East & Africa) sales of $1.45bn were down 13% versus prior year as 1% higher pricing was more than offset by negative 7% volumes primarily due to lower demand in the manufacturing and metals end market.

Operating profit of $303m was 20.9% of sales, up 110 basis points versus prior year.

Linde Engineering sales were $810m and operating profit was $138m or 17% of sales. Operating profit grew 39% versus prior year due primarily to strong project execution and productivity initiatives.


“Looking ahead, the full effects of Covid-19 and the rate of recovery are uncertain,” Angel said. “However, the growth opportunities for Linde remain strong from our high-quality project backlog, defensive end markets and leading infrastructure and technology in support of the secular trend in clean energy.”

“Our resilient business model combined with our ability to continuously optimize business performance, while capitalising on short and long-term growth opportunities, gives me the confidence that Linde can grow earnings in any environment.”

Linde said full-year capital expenditures are expected to between $3bn to $3.4bn to support maintenance and growth requirements including the $3.6bn contractual sale of gas project backlog.