Despite a challenging year dominated by the Covid-19 pandemic, Linde plc today reported better than expected fourth quarter (Q4) and full year 2020 results which saw the industrial gas giant grow its EPS 12% and operating cash flow 21%.
Linde reported income from continuing operations of $769m and diluted earnings per share of $1.45.
Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1.2bn, up 19% versus prior year and 7% sequentially.
Commenting on the financial results and business outlook, CEO Steve Angel said, “I want to personally thank all our dedicated Linde employees for ensuring a safe and reliable supply of critical gases and services to our customers and patients worldwide.”
“The company responded exceptionally well in a challenging year dominated by the Covid-19 pandemic and I couldn’t be more proud of what we accomplished and continue to do for our shareholders and society at large.”
“Despite all the headwinds we faced throughout the year, Linde grew EPS 12%, operating cash flow 21%, and increased ROC to 13.4% - all while improving our sustainability performance.”
Angel continued, “Looking ahead, the near-term economic outlook remains uncertain. However, I have confidence in our ability to grow EPS double-digit percent irrespective of the macro environment while also leveraging any economic recovery.”
“In addition, I expect to capture more than our fair share of quality growth opportunities in secular markets like healthcare, electronics and clean energy.”
Linde’s sales for Q4 were $7.27bn, 3% above prior year and 6% sequentially.
Compared to prior year, Linde said underlying sales increased 3% from 2% price attainment and 1% higher volumes, largely due to project start-ups.
Sequentially, underlying sales increased 2%, mainly driven by higher volumes across all segments.
Q4 operating profit was $1.03bn. Adjusted operating profit of $1.6bn was up 20% versus prior year led by higher price and continued productivity initiatives across all segments.
Q4 operating cash flow of $2.43bn increased 12% versus prior year and 29% sequentially.
After capital expenditures of $1.03bn, free cash flow was $1.4bn, up 21% versus prior year.
For full-year 2020, sales were $27.2bn, 3% below 2019. Price improved 2% as all geographic segments attained price increases.
Volume decreased 2% as growth from project start-ups was more than offset by the global macroeconomic slowdown as a result of the Covid-19 pandemic.
Operating profit was $3.3bn and adjusted operating profit was $5.8bn, 21.3% of sales, and increased 10% versus 2019.
In 2020, Linde generated strong operating cash flow of $7.4bn, up 21% versus prior year.
The company invested $3.4bn in capital expenditures and paid dividends of $2bn. In addition, Linde repurchased $2.4bn of stock, net of issuances.
Americas sales of $2.72bn were flat versus prior year quarter, but increased 3% sequentially.
Compared with Q4 2019, underlying sales increased 3% driven by 2% higher pricing and 1% higher volume, primarily in the healthcare end market.
Sequentially, price was stable and volumes grew 2%, led by higher demand in metals and manufacturing end markets.
Operating profit of $748m was 27.5% of sales, up 280 basis points versus prior year.
APAC (Asia Pacific) sales of $1.57bn were 12% above prior year and up 6% sequentially.
Compared to prior year, underlying sales grew 8% driven by 1% price attainment and 7% volume growth, primarily in the electronics end market and project start-ups.
Sequentially, price was steady and volumes grew 3% led by higher demand in the electronics and metals end markets.
Operating profit of $365m was 23.2% of sales, up 190 basis points versus prior year.
EMEA (Europe, Middle East & Africa) sales of $1.74bn were up 6% versus prior year and grew 8% sequentially.
Compared with Q4 2019, underlying sales grew 4%, primarily led by 3% higher pricing.
Sequentially, underlying sales grew 5% driven by 2% higher pricing and 3% volume growth, mainly in the healthcare end market.
Operating profit of $437m was 25% of sales, up 370 basis points versus prior year.
Linde Engineering sales were $755m, 2% below prior year, and operating profit was $100m or 13.2% of sales.
Order intake for the quarter was $355m and third party sale of equipment backlog was $4.7bn.
Karina Kocha, gasworld’s Business Intelligence (BI) Manager, said, ”After the merger of Linde and Praxair in 2018, the newly founded Linde plc became the largest gas company in the world. Linde’s global market share in 2020 was about 30%, while the largest share (about 35%) comes from the packaged gas sales. The largest markets for Linde plc were North America, which occupies just under 40% of Linde regional portfolio and Western Europe, with 25% of total WW gas sales of the company.”