Linde employees have delivered another quarter of ‘record breaking’ financial results, according to CEO Steve Angel, reported in the company’s quarter two (Q2) financial results published today (30th July).
With operating profit margins expanding 350 basis points, ROC also improved to 15.7% and adjusted earnings per share (EPS) grew by 42%, reaching an all-time high of $2.70, according to Angel.
Commenting on the positive results, he said, “Our team continues to execute well against our core strategy, producing industry leading performance.”
“Looking ahead, I’m confident the company will deliver another outstanding year.”
The report revealed Q2 2021 income from continuing operations of $840m and diluted earnings per share increasing by 84% to $1.60 per share.
Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,415m, up 41% from the previous year and 8% sequentially.
Q2 sales saw $7,584m, 19% above the previous year and up 5% sequentially. Underlying sales increased 18% compared to the previous year, including 3% price attainment and 15% higher volumes. These were led by healthcare, electronics and a recovery in the cyclical end markets of manufacturing, metals, chemicals and refining.
Sequentially, underlying sales increased 5% driven by higher volume and price.
Q2 operating profit was $1,142m, with the adjusted operating profit of $1,837m up 39% versus the previous year led by higher price, strong volume and continued productivity initiatives across all segments.
The adjusted operating margin of 24.2% expanded 350 basis points compared to the previous year and 90 basis points sequentially.
The company’s Q2 operating cash flow of $1,827m increased 4% versus prior year. After capital expenditures of $744m, free cash flow was $1,083m, up 10% versus prior year.
During the quarter, Linde returned $1,748m to shareholders through dividends and stock repurchases, net of issuance.
Linde ended Q2 with a total backlog of approximately $7.5bn which includes both sale of gas and sale of plant projects, all contractually secured with high-quality customers.
Results by segment
Americas sales of $3,020m were 25% above prior years. Underlying sales increased 21% driven by 3% higher pricing and 18% higher volume, led by stronger demand across all end markets and project start-ups.
Sequentially, price increased 1% and volumes grew 5%, led primarily by higher demand in the cyclical end markets.
Operating profit of $871m was 28.8% of sales, up 310 basis points versus prior year.
APAC (Asia Pacific) sales of $1,544m were 19% above prior year. Underlying sales grew 21% driven by 2% price attainment and 19% volume growth, led by higher demand across all end markets, plus project start-ups.
Sequentially, price increased 1% and volume grew 7% led by electronics and cyclical end markets.
Divestitures were driven by an accounting deconsolidation of a joint venture which reduced sales 12% versus prior year but had no impact on earnings per share.
Operating profit of $389m was 25.2% of sales, up 250 basis points versus prior year.
EMEA (Europe, Middle East & Africa) sales of $1,875m were up 29% above prior year. Underlying sales grew 16% from 4% higher pricing and 12% higher volumes across all end markets.
Sequentially, underlying sales were up 3% from 1% pricing and 2% volumes.
Operating profit of $487m was 26.0% of sales, up 510 basis points versus prior year.
Linde Engineering sales were $646m, 20% below prior year largely due to the timing of plant completion and operating profit was $108m or 16.7% of sales.
Order intake for the quarter was $355m and third-party sale of plant backlog was $4.1bn.