At its meeting yesterday, the Supervisory Board of Linde AG approved the financial statements of the holding company and the Group financial statements for the 2010 financial year.

Linde achieved double-digit growth in both sales and operating profit, surpassing its previous best figures posted in the 2008 financial year.

$quot;The global economy has grown faster and more vigorously than might have been expected,$quot; enthused Professor Dr Wolfgang Reitzle, CEO of Linde AG.

$quot;But our good performance is not just due to the recovery of the global economy. It is also the result of us being in a position to seize growth opportunities as they arise. Our gases and engineering businesses have a global presence. What’s more, we have continued to achieve efficiency gains.$quot;

In the 2010 financial year, group sales rose 14.8% to €12.868bn (2009: €11.211bn). By way of comparison, Linde achieved sales in the 2008 financial year of €12.663bn.

The group continued to increase its profitability, with operating profit growing at a faster rate than sales, up 22.6% to €2.925bn. Group operating profit in 2008 was €2.555bn.

The group's operating margin in the 2010 financial year increased by 140 basis points to 22.7%, with Linde able to benefit significantly from the positive impact of its High Performance Organisation (HPO) programme which is designed to achieve sustainable process optimisation and efficiency gains.

As a result, Linde is looking to the future with confidence. “We have set ourselves new medium-term targets,” explained Reitzle.

“We will be aiming to achieve group operating profit of at least €4bn in the 2014 financial year. Our minimum target for return on capital employed for the same year is 14%.”

This four-year forecast is based on current economic estimates and prevailing exchange rates.

The group meeting yesterday also saw Sanjiv Lamba appointed as a new member of the Linde AG Executive Board with immediate effect.

Lamba, who is based in Singapore, will be responsible in future for the gases business of the group in Greater China, South and East Asia and in the South Pacific region. He will also assume responsibility for the Asian joint ventures and for the electronic gases product segment.

Lamba’s most recent role was managing Linde’s business in the South and East Asia region, which forms part of the Asia & Eastern Europe operating segment.

$quot;We are delighted that the Supervisory Board has appointed Sanjiv Lamba to the Executive Board. This appointment demonstrates our awareness of the growing importance of the emerging economies of Asia to our Group,$quot; explained Reitzle.

Rising demand
According to Linde, the improvement in the general economic climate throughout the course of the 2010 financial year resulted in a rise in demand in the global gases business - as may well have been expected.

To what extent, however, may have been an interesting question. For Linde, this background made for a 14.5% increase in sales in its Gases Division to achieve €10.228bn, compared with €8.932bn in 2009. On a comparable basis, changes in the price of natural gas and changes to group structure, sales grew 5.7% – Linde achieved a significant improvement in profitability in the Gases Division, where operating profit rose 16.3% to €2.766bn.

Business trends in the various operating segments of the Gases Division reflect great regional variations in the pace of the economic recovery. The fastest growth was to be seen in the emerging economies of Asia, especially in China and India, and in South America. In contrast, in the more mature economies, such as the US and Western Europe, economic output grew at a relatively modest rate.

Even in those regions, demand rose in the course of 2010.

In the on-site business, where gases are supplied on-site to major customers, Linde achieved the highest rate of growth. The group benefited from the continued improvement in capacity utilisation in existing plants and from new plants coming on-stream.

Meanwhile in the liquefied gases business, sales on a comparable basis were €2.487bn, a 6.6% increase compared with the prior-year figure of €2.333bn. In the cylinder gas business, Linde achieved a 3.4% increase in sales on a comparable basis to €4.160bn.

Linde's Healthcare product segment, which supplies medical gases and provides related after-sales and advisory services, continued to deliver a solid performance, with sales rising 4.2% on a comparable basis to €1.130bn.

Outlook
Linde notes that its original target for the gases business 'has not changed' and that the group wants to grow at a faster rate than the market – and continue to increase its productivity.

In the on-site business, Linde has a healthy project pipeline, which will make a significant contribution to sales and operating profit in the 2011 financial year. The liquefied gases and cylinder gas business should benefit from the continuing general economic recovery, the company explains, while in the Healthcare product segment Linde expects the positive business trends to continue, with sales growing at a faster rate than in 2010.

Against this background, Linde assumes that sales generated by the Gases Division in the 2011 financial year will be higher than in 2010 and that operating profit will increase at a faster rate than sales.