With the news that The Linde Group once again gave a robust performance in the 2012 financial year, achieving significant increases in group revenue and operating profit, how were these results achieved?

Newly-acquired homecare company Lincare features prominently in the group’s results and especially when referring to its rise in group revenues, with the Florida-based business already contributing €630m to group revenue.

So how did the group’s results break down across the its divisions, respectively?

Gases Division

Linde achieved revenue growth in its Gases Division in 2012, of 13.8% to €12.591bn. When considering this increase, the acquisition of Lincare, a transaction completed by Linde in August 2012, should be taken into account.

Linde 2013 results

The improvement in operating profit in Linde’s Gases Division was 11.9%, which rose to €3.403bn, resulting in an operating margin of 27%.

When comparing the operating margin with that for the previous year, it should be noted that during the financial year Linde recognised one-off costs resulting from capacity adjustments in the solar industry.

In addition, the up-front investment required to expand the business and employ new staff in the growth market of Asia had an adverse impact on earnings and the operating margin in the Gases Division.

Varying business trends were to be seen in the individual segments in the Gases Division, Linde notes, depending on prevailing economic conditions.

Linde 2013 results

In the EMEA segment (Europe, Middle East, Africa), revenue rose by 5.7% to €5.998bn, though business performance in this segment was adversely affected by unfavourable economic conditions in the eurozone. A planned stoppage for maintenance at a plant in Southern Europe also acted as a brake on revenue trends. In addition, Linde had to recognise total impairment losses in this segment of €43m in 2012.

In Eastern Europe and in the Middle East, Linde was able to benefit from a good economic environment.

The Continental European homecare operations acquired by Linde from Air Products at the end of April 2012 were one of the factors in the expansion of business in the EMEA region.

In Asia, economic trends remained relatively dynamic. In its Asia/Pacific segment, especially in China, Linde was able to achieve significant growth in revenue and operating profit, with revenue in the Asia-Pacific segment rising by 13.7% to €3.498bn. Operating profit was up 7.2% to €935m.

nde 2013 results

In the Americas segment, revenue in the 2012 financial year grew by 34.2% to €3.2bn and this significant increase was, again, mainly due to the positive contribution made by US homecare company Lincare. Operating profit rose at a faster rate than sales, by 43.6% to €768m, while at 24% the operating margin significantly exceeded the figure for 2011 of 22.4%.

In terms of business lines within the Gases Division, a comparison between the product areas reveals that the fastest rate of growth was to be seen, as expected, in the Healthcare business – where revenue rose 65%. Without the contribution of Lincare, Linde would have achieved an increase in revenue in the Healthcare product area of 14.2%. In the cylinder gas product area, revenue rose to €4.254bn, while in the liquefied gases business, revenue increased on a comparable basis by 2.6% to €3.381bn. In the onsite business, revenue grew on a comparable basis by 4% to €2.921bn.

Engineering Division

In its international engineering project business, Linde continued to see relatively steady trends in the 2012 financial year. There was a slight increase in revenue in the Engineering Division of 1.2% to €2.561bn, while operating profit improved by 2.6% to €312m.

The group notes a strong upward trend in order intake; contributing to this significant increase was the higher number of orders from the group’s Gases Division, seen as a confirmation of the success of Linde’s integrated business model. An example of this is a major project in Saudi Arabia awarded by Linde’s Gases Division to its Engineering Division in 2012, worth a total of $380m.

In its air separation plant business, Linde was awarded some significant contracts in 2012, especially in Asia. In India, for example, the group will build two large plants for the company Tata Steel Limited on its site in the Kalinganagar industrial complex.


With such a positive set of results for 2012, what does The Linde Grup expect for the year ahead?

For the Engineering Division, a relatively stable market environment is expected in the international large-scale plant construction business over the next few years. The high order backlog creates a good basis for a solid business performance in the Engineering Division over the next two years and Linde expects to generate the same level of revenue in its plant construction business in the 2013 and 2014 financial years as in 2012.

Linde also anticipates that it will achieve an operating margin in 2013 of around 10%.

linde 2013 results

As for its Gases Division, recent economic forecasts indicate that the global gases market will grow at a faster rate in 2013 than in 2012 and Linde therefore remains committed to its original target in the gases business – of outperforming the market and continuing to increase productivity.

In its onsite business, Linde has a ‘healthy project pipeline’ which it claims will continue to make a substantial contribution to revenue and earnings trends in the coming years.

The group expects its liquefied gases and cylinder gas product areas to perform in line with macroeconomic trends, while n the healthcare business Linde anticipates that it will achieve significant increases in revenue and earnings as a result of the acquisitions it has concluded, especially Lincare.