Linde CEO Steve Angel said the company’s business model and ability to leverage any economic recovery has led to “stellar” quarter one (Q1) financial results, reported today (6th May).
“Linde employees delivered another strong quarter of financial results with operating profit margins expanding over 320 basis points, ROC improving to 14.5% and operating cash flow increasing 57%,” Angel said.
“In addition, EPS grew 32%, reaching a new record high of $2.49. The resiliency of our business model coupled with the ability to leverage any economic recovery has allowed Linde to continue delivering stellar results.”
He continued, “Looking ahead, I have confidence the company will continue to create significant shareholder value for years to come.”
Delivering its financials today, the industrial gas giant reported Q1 2021 income from continuing operations of $979m and diluted earnings per share of $1.86. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,312m, up 30% versus prior year and 8% sequentially.
Linde’s Q1 sales were $7,243m, 7% above prior year and flat sequentially. Compared to prior year, underlying sales increased 5%, including 2% price attainment and 3% higher volumes, led by healthcare, electronics and a recovery in the cyclical end markets of manufacturing, metals, chemicals and refining.
Sequentially, underlying sales increased 2% driven by higher volume and price.
Q1 operating profit was $1,213m. Adjusted operating profit of $1,688m was up 25% versus prior year led by higher price and continued productivity initiatives across all segments, Linde said.
Adjusted operating margin of 23.3% expanded 320 basis points versus prior year and 110 basis points sequentially.
Q1 operating cash flow of $2,109m increased 57% versus prior year. After capital expenditures of $762m, free cash flow was $1,347m, up 148% versus prior year.
During the quarter, Linde said it returned $1,404m to shareholders through dividends and stock repurchases, net of issuance.
Results by segment
Americas sales of $2,840m were 6% above prior year. Underlying sales increased 7% driven by 3% higher pricing and 4% higher volume, led by higher demand across all end markets.
Sequentially, price increased 1% and volumes grew 3%, led by higher demand in healthcare, electronics and cyclical end markets.
Operating profit of $795m was 28.0% of sales, up 330 basis points versus prior year.
APAC (Asia Pacific) sales of $1,436m were 7% above prior year. Underlying sales grew 11% driven by 1% price attainment and 10% volume growth, primarily in the electronics and cyclical end markets plus project start-ups.
Sequentially, volume was flat as contribution from project start-ups was offset by weaker base volumes, mainly due to seasonality.
Operating profit of $351m was 24.4% of sales, up 340 basis points versus prior year.
EMEA (Europe, Middle East & Africa) sales of $1,799m were up 10% versus prior year. Underlying sales grew 4%, primarily led by 3% higher pricing and increased demand from the healthcare end market.
Sequentially, underlying sales were flat, with 1% higher pricing offset by slightly lower volumes.
Operating profit of $451m was 25.1% of sales, up 340 basis points versus prior year.
Linde Engineering sales were $674m, 11% above prior year, and operating profit was $109m or 16.2% of sales.
Order intake for the quarter was $461m, up 30% sequentially, and third-party sale of equipment backlog was $4.3bn.