Linde achieves double-digit growth and sets new medium-term targets


Corporate News

  • 2012 financial year:
    • Group revenue up 10.8 percent to EUR 15.280 bn
    • Group operating profit1 up 10.0 percent to EUR 3.530 bn
    • 8 percent increase in proposed dividend to EUR 2.70 per share
  • Group outlook for 2013 confirmed: Increase in revenue and operating profit of at least EUR 4 bn
  • Continued implementation of concept designed to achieve sustainable efficiency gains:
    • 2013-16: Further reductions in gross costs totalling EUR 750 m to EUR 900 m
  • Medium-term targets for 2016: Group operating profit of at least EUR 5 bn and ROCE2 of around 14 percent


Munich, 7 March 2013 – The technology company The Linde Group continued to give a robust performance in the 2012 financial year, again achieving significant increases in Group revenue and Group operating profit. "We have been able to hold our own, although the climate has worsened in the course of the year," said Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. "This shows that our business model, which is geared towards sustainability, is working. The stability of the Group has been further strengthened by our acquisition of Lincare."

Against this background, it is with real confidence that Linde looks to the future. "Even though conditions are unlikely to improve, we are sticking to our targets," commented Reitzle. "In the 2013 financial year, we want once again to generate higher Group revenue than in the previous year and to achieve Group operating profit of at least EUR 4 bn." The Group has also set itself new medium-term targets. "We are seeking to generate Group operating profit of at least EUR
5 bn in the 2016 financial year. In that same year, return on capital employed (ROCE) should reach around 14 percent."

Linde continues to see good opportunities for growth especially in global megatrends, energy and the environment, healthcare, and in the emerging economies. "We are determined to seize these opportunities as they arise and to work consistently to enhance the performance of our Group," explained Reitzle. Linde will continue to implement HPO, its holistic concept designed to achieve sustainable efficiency gains, and it plans to reduce total gross costs by a further EUR 750 m to EUR 900 m in the years 2013 to 2016.

In the 2012 financial year, Group revenue grew by 10.8 percent to EUR 15.280 bn (2011: EUR 13.787 bn). After adjusting for exchange rate effects, the increase was 6.4 percent. The newly-acquired Lincare business contributed EUR 630 m to Group revenue. Linde achieved an increase in Group operating profit (EBITDA) of 10.0 percent to EUR 3.530 bn (2011: EUR 3.210 bn). The Group operating margin in the 2012 financial year was 23.1 percent, almost as high as the level achieved in 2011 of 23.3 percent.

Earnings before taxes on income (EBT) rose by 4.2 percent to EUR 1.687 bn (2011: EUR 1.619 bn). Earnings after tax of EUR 1.324 bn were 6.4 percent above the figure for 2011 of EUR 1.244 bn. The amount attributable to Linde AG shareholders was EUR 1.250 bn (2011: EUR 1.174 bn), giving earnings per share of EUR 7.03 (2011: EUR 6.88).

Return on capital employed was 11.5 percent (2011: 13.0 percent)3. When comparing the figures for 2012 and 2011, it is important to note that earnings were adversely affected by impairment losses and the amortisation of fair value adjustments identified in the course of purchase price allocations relating to the acquisitions made by the Group during the 2012 financial year. Another factor to be considered is that many large-scale projects in the on-site business are still in the construction phase and were therefore not yet able to contribute to earnings.

The Executive Board and Supervisory Board of Linde AG will propose a resolution at the Annual General Meeting to be held on 29 May 2013 that a dividend of EUR 2.70 per share be paid. This is an increase of 8.0 percent compared with the prior-year dividend of EUR 2.50.


Gases Division

Linde achieved revenue growth in the Gases Division in 2012 of 13.8 percent to EUR 12.591 bn (2011: EUR 11.061 bn). When considering this increase, the acquisition of Lincare, a transaction completed by Linde in August 2012, should be taken into account. During the reporting period, Lincare contributed EUR 630 m to the total revenue of the Gases Division. On a comparable basis, i.e. after adjusting for exchange rate effects, changes in the price of natural gas and Lincare's post-acquisition revenue, the increase in revenue was 3.8 percent.

The improvement in operating profit in Linde's Gases Division was 11.9 percent. Operating profit rose to EUR 3.403 bn (2011: EUR 3.041 bn), resulting in an operating margin of 27.0 percent (2011: 27.5 percent). 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, depending on prevailing economic conditions.

In the EMEAsegment (Europe, Middle East, Africa), revenue rose by 5.7 percent to EUR 5.998 bn (2011: EUR 5.672 bn). On a comparable basis, the growth in revenue was 4.1 percent. Operating profit increased by 4.0 percent to EUR 1.700 bn (2011: EUR 1.634 bn). This resulted in an operating margin of 28.3 percent (2011: 28.8 percent). 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. During the reporting period, these operations contributed EUR 132 m to the total revenue of the EMEA segment.

Business performance in the EMEA 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 EUR 43 m in 2012. In Eastern Europe and in the Middle East, Linde was able to benefit from a good economic environment.

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. The Group also benefited here from its leading position in these markets. In the 2012 financial year, revenue in the Asia/Pacific segment rose by 13.7 percent to EUR 3.498 bn (2011: EUR 3.076 bn). On a comparable basis, the increase in revenue was 5.0 percent. 

Operating profit was up 7.2 percent to EUR 935 m (2011: EUR 872 m). This resulted in an operating margin of 26.7 percent (2011: 28.3 percent). When comparing the figures with those of the prior year, a factor to be taken into consideration is the up-front investment required to grow the business, especially in the rapidly expanding Chinese market. Business performance in the reporting period was also adversely affected by temporary plant stoppages. 

In the Americas segment, revenue in the 2012 financial year grew by 34.2 percent to EUR 3.200 bn (2011: EUR 2.384 bn). This significant increase was mainly due to the positive contribution made by US homecare company Lincare. Lincare operates solely in North America and contributed EUR 630 m in the 2012 financial year to the total revenue of the Americas segment. On a comparable basis, Linde would have achieved an increase in revenue in this segment of 2.8 percent. 

Operating profit rose at a faster rate than sales, by 43.6 percent to EUR 768 m (2011: EUR 535 m). At 24.0 percent, the operating margin significantly exceeded the figure for 2011 of 22.4 percent. The main reason for the increase was the newly-acquired Lincare business.

A comparison between the product areas in the Gases Division reveals that the fastest rate of growth was to be seen, as expected, in the Healthcare business. With newly-acquired homecare company Lincare, revenue here rose by 65.4 percent after adjusting for exchange rate effects to EUR 2.035 bn (2011: EUR 1.230 bn). Without the Lincare contribution, Linde would have achieved an increase in revenue in the Healthcare product area of 14.2 percent.

In the cylinder gas product area, revenue rose to EUR 4.254 bn. On a comparable basis, this was an increase of 1.6 percent when compared with the prior-year figure of EUR 4.188 bn. In the liquefied gases business, revenue increased on a comparable basis by 2.6 percent to EUR 3.381 bn (2011: EUR 3.296 bn). In the on-site business (where Linde supplies gases on site to major customers), revenue grew on a comparable basis by 4.0 percent to EUR 2.921 bn (2011: EUR 2.809 bn). Plant stoppages acted as a brake on trends in this product area. It is also worth noting that Linde achieved most of the growth in the on-site product area through joint ventures and that the Group’s share of revenue from these joint ventures is not disclosed in the revenue of the Gases Division.


Gases Division – Outlook

Recent economic forecasts indicate that the global gases market will grow at a somewhat faster rate in 2013 than in 2012. Linde remains committed to its original target in the gases business of outperforming the market and continuing to increase productivity.

In its on-site business, Linde has a healthy project pipeline, which 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. In 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.

Against this background, Linde expects that revenue generated by the Gases Division in the 2013 and 2014 financial years will continue to increase and that operating profit will improve in both years.


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 percent to EUR 2.561 bn (2011: EUR 2.531 bn). Operating profit improved by 2.6 percent to EUR 312 m (2011: EUR 304 m). The operating margin was 12.2 percent, exceeding the high level achieved in 2011 of 12.0 percent.

There was a strong upward trend in order intake. This rose to EUR 2.815 bn in 2012, 26.0 percent above the figure for 2011 of EUR 2.235 bn. Contributing to this significant increase was the higher number of orders from the Group's Gases Division, a confirmation of the success of Linde's integrated business model. One example of this is a major project in Saudi Arabia awarded by Linde's Gases Division to its Engineering Division in 2012. The project is worth a total of USD 380 m. That part of the project which relates to the Engineering Division involves the turnkey construction of a HyCo plant and an ammonia plant. The new plants will enable Linde to provide Sadara Petrochemical Company in Jubail with long-term supplies of industrial gases.

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. Around EUR 80 m will be invested in this project.

As a result of good order trends, the order backlog in the Engineering Division continued to grow. At 31 December 2012, it stood at EUR 3.700 bn (2011: EUR 3.600 bn).


Engineering Division – Outlook

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. Linde expects to generate the same level of revenue in its plant construction business in the 2013 and 2014 financial years as in 2012. It anticipates that it will achieve an operating margin in 2013 of around 10 percent. Linde is well-positioned in the international market for olefin plants, natural gas plants, air separation plants and hydrogen and synthesis gas plants and will derive lasting benefit in particular from investment in two structural growth areas: energy and the environment.



Note: The 2012 Annual Report of The Linde Group is available on the Internet at:

To coincide with the publication of the financial statements, a webcast for analysts will take place today at 2pm German time in English with Professor Dr Wolfgang Reitzle, CEO of Linde AG, and Georg Denoke, CFO of Linde AG. Journalists will have the opportunity to watch the webcast by following this link:

The Linde Group is a world-leading gases and engineering company with around 62,000 employees in more than 100 countries worldwide. In the 2012 financial year, Linde generated revenue of EUR 15.280 bn. The strategy of the Group is geared towards long-term profitable growth and focuses on the expansion of its international business with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment – in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development.


For more information, see The Linde Group online at


1Operating profit: EBITDA including share of profit or loss from associates and joint ventures.
2Adjusted for the amortisation of fair value adjustments identified in the course of the BOC purchase price allocation.
3Adjusted for the amortisation of fair value adjustments identified in the course of the BOC purchase price alocation.



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