The Linde Group has posted a solid performance and is ready to face the difficult economic environment.
In the 2008 financial year, The Linde Group achieved sales growth, and operating profit increased at a faster rate than sales.
On the basis of reported figures, sales in 2008 were up 2.9% to €12.663bn, and a Group operating profit of €2.555bn was 5.4% higher than the figure for 2007.
After adjusting for exchange rate effects in both cases, sales in were up 8.4%, and Group operating profit was up 10.3%.
Earnings before tax (EBT) were €1.006bn, which was below the previous year figure of €1.375bn, although it should be noted that in 2007 there was a profit on disposal of businesses of €607mn, which was disclosed as a non-recurring item.
In the 2008 financial year, Linde made a profit on the disposal of businesses of €59mn.
Earnings after tax in the 2008 financial year were €776mn; the amount attributable to Linde AG shareholders was €717mn, this corresponds to earnings per share (EPS) of €4.27.
However, the profit on disposal of businesses in 2008 and 2007 also had an impact on these figures; after adjusting for this effect and for the amortisation of fair value adjustments identified in the course of the purchase price allocation relating to the BOC acquisition, earnings per share rose by 8.8% from €5.02 in 2007 to €5.46 in 2008.
As a result of its good overall business performance, Linde again improved its cash flow from operating activities by 7.7%, ROCE (return on capital employed) also increased and at 12.4% was significantly higher than the previous year figure of 10.3%.
Net financial debt, which stood at €6.423bn at 31st December 2008, was almost the same as the previous year figure of €6.427bn.
The Gases Division achieved sales of €9.515bn, a growth of 3.3% (or 9.3% after adjusting for exchange rates) compared to the 2007 figure of €9.209bn.
Operating profit in the Gases Division rose again at a faster rate than sales, with a 4.5% (or 9.6% with exchange rate adjustment) increase to €2.417bn.
Looking at performance in the Gases Division on a regional basis, the highest rates of growth were achieved in the Asia and Eastern Europe operating segment.
In the group’s biggest sales market, Western Europe, sales increased by 2.7%, and business was characterised above all by increases in sales volumes and positive price trends in the cylinder gas product segment in the major markets, Germany and the UK.
In the Americas operating segment, the group achieved sales of €2.207bn, not quite as high as the previous year; however, included in the previous year’s figure was the US cylinder gas business, sold in 2007, and the eight air separation plants which the group had to sell as a result of conditions imposed by the competition authorities.
In the South Pacific and Africa operating segment, Linde increased sales by 2.0%; the slowdown in sales growth was due mainly to the depreciation of the South African rand and the Australian dollar.
As far as individual product segments are concerned, sales in the cylinder gas business rose 9.2% and the group’s liquefied gases business saw growth of 3.7%.
In the on-site business, where the group supplies industrial gases from plants situated directly on the customer's site, sales increased by 4.9%, and in the healthcare or medical gases segment, the group achieved sales growth of 9.8%.
The group said that expected weakness in demand this year has not caused it to change its original target for the gases business.
It wants to grow at a more rapid pace than the market and continue to increase its productivity.
The scenarios for the forecast business performance of the Gases Division in the current year 2009 range from a slight rise in sales and earnings to a decline in sales and earnings.
At the press conference on the annual results, Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG said, $quot;This really solid business performance, despite the onset of the financial and economic crisis, indicates that our Group reorganisation has proved worthwhile.$quot;
He did however add that even The Linde Group is not immune to global recession; $quot;To stay on track even in this difficult economic situation, we will accelerate the implementation of our integrated programme to achieve sustainable improvements in our processes and increase productivity.$quot;
For the rest of the current year 2009, against a background of continuing uncertainty, Linde is planning for future global economic development in a number of different scenarios.
$quot;It still looks possible from today's standpoint that Group sales and earnings will be slightly higher than or at the same level as in 2008. However, we have to consider the possibility of a decline in sales and earnings,$quot; explained CEO Reitzle.
The Executive Board and Supervisory Board of Linde AG will propose a resolution at the Annual General Meeting to be held on 15 May 2009 to increase the dividend from 1.70 euro to 1.80 euro per share.