The Linde Group continued to attain increases in group revenue and operating profit in the nine months to 30th September 2017.
In the results released today, the company revealed that’s its group revenue was 2.4% higher than in the prior-year period. Group operating profit rose by 3.7%. Special items totalling €277m ($325m) have been recognised in the current financial year. These include around €50m ($58m) of merger-related costs.
Cash flow from operating in the nine-month period fell by 7.4% from €2.472bn ($2.904bn) to €2.289bn ($2.689bn). The main reasons for this are payments made for restructuring costs and costs relating to the planned merger with Praxair.
Professor Dr. Aldo Belloni, CEO of Linde AG said, “There were positive trends in revenue and earnings in the first nine months of 2017 and we are also right on track with our efficiency programme.”
The Linde Group generated group revenue from continuing operations in the first nine months of the year of €12.864bn ($15.1152bn), 2.7% more than the revenue for the prior-year period of €12.530bn ($14.722bn). Group operating profit from continuing operations rose by 3.8% to €3.151bn ($3.702bn).
Revenue in the Gases Division in the first nine months of 2017 was €11.244bn ($13.211bn), an increase of 2.1% compared to €11.016bn ($12.93bn) in the prior year period. Revenue rose by 1.8%.
In the Europe, Middle East, Africa (EMEA) segment, the group generated revenue of €4.386bn ($5.153bn) in the first nine months of 2017, which was 2.7% higher than the figure achieved in the first nine months of 2016 of €4.272bn ($5.01961bn). Positive trends were to be seen in the EMEA segment in almost all product areas. In the on-site business, Linde was able to achieve revenue growth in Northern Europe and Middle East & Eastern Europe as a result of plant start-ups. In the liquefied gases and cylinder gas product areas, revenue increased in virtually all regions.
In the Asia/Pacific segment, Linde generated revenue of €3.273bn ($3.845bn) in the period, which was 8.1% above the figure for the first nine months of 2016 of €3.027bn ($3.556bn). Operating profit rose by 15.3% to €914m ($1.073m). Solid volume and revenue increases were achieved in particular in the liquefied gases and on-site product areas.
In the America segment, revenue decreased by 3.3% to €3.719bn ($4.369bn). Positive trends were once again to be seen in the on-site business and the liquefied gases business in North America. In the Healthcare business in North America, on the other hand, the impact of the price reductions in 2016 as a result of government tenders continues to be felt.
Revenue in the Engineering Division increased by 4.0% to €1.809bn ($2.125bn). Operating profit also rose, from €146m ($171m) in the first nine months of 2016 to €152m ($178m) in the first nine months of 2017, an increase of 4.1%.
Order intake in the Engineering Division in the nine was €1.969bn ($2.313bn), which was 24% higher than the figure of €1.587bn (1.864bn) in the prior-year period. The order backlog remained solid at €4.378bn ($5.144bn).
The group is expecting to achieve an increase in revenue after adjusting for exchange rate effects in the 2017 financial year of 3%, although the challenging market environment could result in a decrease of up to 3%. Operating profit in 2017 should be on a par with or up to 7% higher than the figure achieved in 2016.
In the Gases Division, Linde is aiming to generate currency-adjusted revenue in the 2017 financial year which is up to 3% higher than in 2016.
Operating profit is expected to be on a par with or up to 6% higher than in 2016. In the Engineering Division, Linde expects to generate revenue in the 2017 financial year of between €2.0bn ($2.3bn) and €2.4bn ($2.8bn) and an operating margin of around 8%.
Planned merger with Praxair
The new holding company Linde plc has already received 4 of the 24 approvals required from antitrust authorities. The authorities in Pakistan, Paraguay, Russia and Turkey have confirmed that they have no objections to the merger. As planned, the parties concerned are cooperating closely with all the other competition authorities.