The performance of the technology company The Linde Group has remained steady in the nine months ended 30 September 2012, with group revenue and group operating profit both increasing once again.
“We are still on track, even though the economic situation has worsened in the past few months,” said Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. “Lincare has already had a positive impact. The acquisition of this business has made our position even more robust.”
Against this background, CEO Reitzle confirmed the short-term outlook and medium-term outlook for the group, “We continue to expect that we will achieve increases in group revenue and group operating profit in the full year 2012 when compared with the previous year. We want to achieve group operating profit in the 2013 financial year of at least €4bn.” The group is seeking to achieve return on capital employed (ROCE) of at least 14 % in the 2015 financial year.
Linde will continue to apply its holistic concept for sustainable efficiency gains (HPO) after 2012 and is planning to achieve further reductions in gross costs totalling €750m to €900m in the years 2013 to 2016. “This will help to reinforce our high level of profitability even in a challenging environment,” explained Reitzle.
In the first nine months of 2012, group revenue rose by 8.4% to €11.063bn, compared with €10.209bn for the first nine months of 2011. After adjusting for exchange rate effects, the increase in revenue was 3.8 percent. US homecare company, Lincare, contributed to this positive trend for the first time in the third quarter of 2012, generating post-acquisition revenue of €231m. Linde concluded its acquisition of Lincare in August 2012.
Linde continued with the rigorous implementation of its HPO (High Performance Organisation) programme, a holistic concept for sustainable process optimisation and productivity gains, increasing group operating profit by 8.5 percent to €2.563bn (2011: €2.363bn). The group was able to continue to reinforce its high level of profitability and to increase the group operating margin slightly to 23.2% (2011: 23.1%).
Profit for the period rose in the first nine months of 2012 by 6.1 percent to €958m (2011: €903m). Profit attributable to Linde AG shareholders was €904m (2011: €856m). This gives earnings per share of €5.15 (2011: €5.02). When comparing with the figure for the prior-year period, it is important to consider the €1.4bn capital increase undertaken in July 2012 to refinance the Lincare acquisition. The number of Linde shares rose as a result of the capital increase.
On an adjusted basis, i.e. after adjusting for the effects of the purchase price allocation from the BOC acquisition, earnings per share stood at €5.80 (2011: €5.68).
Overall from the third quarter, group revenue up 8.4% to €11.063bn, group operating profit increases by 8.5% to €2.563bn, group operating margin rises slightly to 23.2% (2011: 23.1%), Lincare transaction successfully concluded, Short-term outlook and medium-term outlook confirmed, 2012: Increase in group revenue and group operating profit, 2013: group operating profit of at least €4bn and in 2015: ROCE of at least 14%. Concept designed to achieve sustainable efficiency gains (HPO) to be extended: 2013-2016: Additional reductions in gross costs totalling €750m to €900m.