DGAP-News: Linde plc / Key word(s): Quarter Results/Annual Results
Linde Reports Full-Year and Fourth-Quarter 2020 Results
Guildford, UK, February 5, 2021 - Linde plc (NYSE: LIN; FWB: LIN) today reported fourth-quarter 2020 income from continuing operations of $769 million and diluted earnings per share of $1.45. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,217 million, up 19% versus prior year and 7% sequentially. Adjusted earnings per share was $2.30, 22% above prior year and 7% higher sequentially.
Linde's sales for the fourth quarter were $7,272 million, 3% above prior year and 6% sequentially. Compared to prior year, underlying sales increased 3% from 2% price attainment and 1% higher volumes, largely due to project start-ups. Sequentially, underlying sales increased 2%, mainly driven by higher volumes across all segments.
Fourth-quarter operating profit was $1,029 million. Adjusted operating profit of $1,613 million was up 20% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating margin of 22.2% expanded 320 basis points versus prior year and 10 basis points sequentially.
Fourth-quarter operating cash flow of $2,434 million increased 12% versus prior year and 29% sequentially. After capital expenditures of $1,027 million, free cash flow was $1,407 million, up 21% versus prior year. During the quarter, the company returned $926 million to shareholders through dividends and stock repurchases, net of issuance.
For full-year 2020, sales were $27.2 billion, 3% below 2019. Price improved 2% as all geographic segments attained price increases. Volume decreased 2% as growth from project start-ups was more than offset by the global macroeconomic slowdown as a result of the COVID-19 pandemic. Operating profit was $3.3 billion and adjusted operating profit was $5.8 billion, 21.3% of sales, and increased 10% versus 2019. Diluted earnings per share were $4.70 and adjusted diluted earnings per share were $8.23, up 12% versus prior year.
In 2020, Linde generated strong operating cash flow of $7.4 billion, up 21% versus prior year. The company invested $3.4 billion in capital expenditures and paid dividends of $2.0 billion. In addition, Linde repurchased $2.4 billion of stock, net of issuances.
Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, "I want to personally thank all our dedicated Linde employees for ensuring a safe and reliable supply of critical gases and services to our customers and patients worldwide. The company responded exceptionally well in a challenging year dominated by the COVID-19 pandemic and I couldn't be more proud of what we accomplished and continue to do for our shareholders and society at large. Despite all the headwinds we faced throughout the year, Linde grew EPS 12%, operating cash flow 21%, and increased ROC to 13.4% - all while improving our sustainability performance."
Angel continued, "Looking ahead, the near-term economic outlook remains uncertain. However, I have confidence in our ability to grow EPS double-digit percent irrespective of the macro environment while also leveraging any economic recovery. In addition, I expect to capture more than our fair share of quality growth opportunities in secular markets like healthcare, electronics and clean energy."
For the full year, the company expects adjusted diluted earnings per share to be in the range of $9.10 to $9.30, up 11% to 13% versus prior year and 10% to 12% when excluding estimated currency tailwinds. Full-year capital expenditures are expected to range between $3.0 billion to $3.5 billion to support operating and growth requirements including the $3.6 billion contractual sale of gas project backlog.
APAC (Asia Pacific) sales of $1,572 million were 12% above prior year and up 6% sequentially. Compared to prior year, underlying sales grew 8% driven by 1% price attainment and 7% volume growth, primarily in the electronics end market and project start-ups. Sequentially, price was steady and volumes grew 3% led by higher demand in the electronics and metals end markets. Operating profit of $365 million was 23.2% of sales, up 190 basis points versus prior year.
EMEA (Europe, Middle East & Africa) sales of $1,746 million were up 6% versus prior year and grew 8% sequentially. Compared with fourth quarter 2019, underlying sales grew 4%, primarily led by 3% higher pricing. Sequentially, underlying sales grew 5% driven by 2% higher pricing and 3% volume growth, mainly in the healthcare end market. Operating profit of $437 million was 25.0% of sales, up 370 basis points versus prior year.
Linde Engineering sales were $755 million, 2% below prior year, and operating profit was $100 million or 13.2% of sales. Order intake for the quarter was $355 million and third-party sale of equipment backlog was $4.7 billion.
Materials to be used in the teleconference are also available on the website.
For more information about the company and its products and services, please visit www.linde.com
Adjusted amounts, free cash flow and return on capital are non-GAAP measures. See the attachments (Earnings release tables: https://eqs-cockpit.com/cgi-bin/fncls.ssp?u=7a630ecd7de1935bf044692ded5dcc8c) for a summary of non-GAAP reconciliations and calculations for adjusted amounts.
Attachments: Summary Non-GAAP Reconciliations, Statements of Income, Balance Sheets, Statements of Cash Flows, Segment Information and Appendix: Non-GAAP Measures and Reconciliations.
*Note: We are providing adjusted earnings per share ("EPS") guidance for 2021. This is a non-GAAP financial measure that represents diluted earnings per share from continuing operations (a GAAP measure) but excludes the impact of certain items that we believe are not representative of our underlying business performance, such as cost reduction and other charges, the impact of potential divestitures or other potentially significant items. Given the uncertainty of timing and magnitude of such items, we cannot provide a reconciliation of the differences between the non-GAAP adjusted EPS guidance and the corresponding GAAP EPS measure without unreasonable effort.
Linde plc assumes no obligation to update or provide revisions to any forward-looking statement in response to changing circumstances. The above listed risks and uncertainties are further described in Item 1A. Risk Factors in Linde plc's Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 2, 2020 and in Item 1A. of Linde plc's Form 10-Q for the period ending March 31, 2020 filed with the SEC on May 7, 2020, which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.
05.02.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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