Linde plc (NASDAQ:LIN) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates strong financial performance with an 11% EPS growth and $7 billion returned to shareholders. The backlog and new projects, particularly in electronics and hydrogen, suggest future growth. While the economic outlook is cautious, the optimistic guidance and disciplined capital allocation are positive. The Q&A reveals confidence in margin expansion and project execution, despite some regulatory uncertainties and vague management responses. Overall, the positive aspects outweigh the concerns, suggesting a likely positive stock price movement.
Key Financial Performance
EPS $3.97, increased by 11% year-over-year, or 13% excluding FX.
Sales $8.3 billion, flat compared to the prior year, down 1% sequentially, with a 2% headwind from foreign currency translation.
Operating Profit $2.5 billion, grew by 9%, resulting in a 29.9% margin, primarily due to management actions around price, cost, and productivity.
CapEx Increased by 9%, driven entirely by contractual projects, while base CapEx decreased due to currency, productivity, and lower base volumes.
Operating Cash Flow $9.4 billion for the full year, with almost 60% occurring in the second half.
Capital Returned to Shareholders $7 billion returned to shareholders in the form of dividends and stock repurchases.
Backlog More than $10 billion in backlog, including a record sale of gas backlog of $7 billion.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Low Carbon Energy Consumption: Linde increased its active low carbon and renewable energy consumption by 19% year-over-year, with over 40% of total power consumption now being low carbon based.
Small On-Site Wins: In 2024, Linde signed 59 long-term agreements for a total of 64 plants, enhancing reliability and network density.
Acquisitions: Linde signed 18 transactions for small tuck-in packaged gas opportunities, generating annualized revenues of approximately $200 million.
Gas Backlog: Linde ended the year with a record sale of gas backlog of $7 billion, including a $2-plus billion project win in Canada.
Operating Profit Margin: Operating profit grew 9% to $2.5 billion, resulting in a 29.9% margin, primarily from management actions around price, cost, and productivity.
Capital Allocation: Linde invested $5 billion back into the business, with half underpinned by secured high-quality growth opportunities.
Sustainability Goals: Linde aims to reduce greenhouse gas emissions by 35% by 2035, continuing its focus on sustainability.
EPS Growth Guidance: Linde is initiating full year EPS guidance of $16.15 to $16.55, representing 4% to 7% growth.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Sustainability Challenges: Efforts towards ensuring a sustainable environment are becoming more challenging due to increasingly extreme weather conditions.
Foreign Exchange Risks: Linde is exposed to foreign exchange translation risks, with approximately 2/3 of earnings denominated in foreign currencies, leading to a projected 4% FX translation headwind for 2025.
Economic Factors: The company faces macroeconomic uncertainties, particularly in industrial production, which affects customer gas consumption and is projected to have a flat base volume growth.
Capital Allocation Risks: Mistakes in capital allocation can have long-lasting consequences, emphasizing the need for disciplined contract terms and careful project selection.
Market Competition: Linde must continuously position itself for future growth amidst competitive pressures and cannot afford complacency based on past performance.
Pricing and Inflation Risks: Potential pricing opportunities to recover from currency devaluation impacts are uncertain and not included in the current guidance due to the difficulty in estimating inflation timing.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Sustainability Initiatives: Linde increased its active low carbon and renewable energy consumption by 19% year-over-year, with over 40% of total power consumption now low carbon based. The company aims to reduce greenhouse gas emissions by 35% by 2035.
Project Backlog: Linde ended the year with more than $10 billion in backlog, including a record sale of gas backlog of $7 billion.
Small On-Site Wins: In 2024, Linde signed 59 long-term agreements for a total of 64 plants, enhancing reliability and network density.
Acquisitions: Linde signed 18 transactions for small tuck-in packaged gas opportunities, with annualized revenues of approximately $200 million.
2025 EPS Guidance: Linde's EPS guidance for 2025 is set at $16.15 to $16.55, representing 4% to 7% growth, or 8% to 11% when excluding an estimated 4% currency headwind.
First Quarter EPS Guidance: First quarter EPS guidance is projected to be between $3.85 and $3.95.
Long-term EPS Growth Expectation: Linde expects to deliver 10% plus EPS growth each year, with margin expansion.
CapEx Increase: CapEx is expected to increase by 9%, driven by contractual projects.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Total Capital Returned to Shareholders: $7 billion returned to shareholders in the form of dividends and stock repurchases.
EPS Growth: EPS increased by 11% to $3.97, with a projection of 4% to 7% growth for 2025.
Share Repurchases: Share repurchases are highlighted as an attractive and flexible use of excess free cash flow.
Capital Allocation Policy: Linde maintains a disciplined capital allocation policy that includes share repurchases.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:How has your discussions with potential project partners evolved, particularly for projects that are pre-FID?
A:We have seen people take a little bit more time and apply a bit more rigor before going to FID. This is a good thing for multibillion-dollar projects. There is uncertainty around the regulatory framework, but we feel confident about the 45Q provision in the IRA, which is crucial for our projects.
Q:Do you think your Americas margins will gain ground in ’25, and how does that compare to APAC?
A:Our expectation remains that margins will continue to improve across all segments, including Americas and APAC. We anticipate margin expansion in 2025, typically between 20 to 50 basis points.
Q:What is the leverage if IP is up or down 1%? How much EPS does that generally drive for you?
A:The correlation between IP and EPS is complex, as project volumes track independently of IP. Base volumes align with IP, and we see higher IP leverage in developing countries.
Q:What are your concerns regarding the management change and its impact on Linde's playbook?
A:Linde has a strong market position built over decades, and we will continue to reflect that in our behaviors. The leadership position cannot be easily replicated.
Q:What are your expectations for growth in the healthcare sector?
A:We expect long-term mid-single-digit growth in healthcare, with the hospital care business growing well and home care rationalization impacting current numbers.
Q:What is the status of your electronics projects?
A:20% of our backlog is in electronics, and we are executing on several projects, with new wins expected to be announced soon.
Q:What is the outlook for cash flow from operations in 2025?
A:We expect cash flow from operations to align more closely with EBITDA growth rates in 2025.
Q:How much of your equipment backlog is locked in against tariffs?
A:Our contractual protections typically cover tariffs, and we have not seen significant impacts from tariffs on our projects.
Q:What is your view on the helium market?
A:The helium market remains stable, with some regions experiencing oversupply. Pricing has not seen significant movements recently.
Q:Can you provide details on the CCS hub in Jabal?
A:It’s a 3-way joint venture with Saudi Aramco and SRB, aiming to sequester 9-11 million tonnes of CO2 in the first phase, with potential for future phases.
Q:What is your view on the pipeline of potential hydrogen projects in the EU and Japan?
A:The regulatory framework in Europe is challenging, which may hinder the realization of hydrogen projects. Japan is more focused on importing hydrogen.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer to the question about the impact of management changes on Linde's playbook, as the response was vague and did not address specific concerns raised.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI productivity
Acquisitions tuck
CO emission
Canada example
Capital allocation
Dow Jones
EBIT basis
FX capital
FX translation
Global IP
History compound
IP environment
IP proxy
acquisition
algorithm
allocation action
category
community priority
consumption
contribution capital
core
culture
effort
element
employee
ownership
payment
people community
power
pride
rate
record
self help
share repurchase
structure
sustainability
term industry
use
win
LIN Transcript
Linde plc (LIN) Q3 2025 Earnings Call Transcript
Positive10-31
The earnings call summary indicates a generally positive outlook, with strong financial performance and optimistic guidance. The Q&A section reveals concerns about pricing and market risks, but management's responses suggest confidence in overcoming these challenges. Key positive factors include a strong project backlog, strategic investments, and growth in key sectors like AI and semiconductors. The overall sentiment is positive, with expectations of continued growth and resilience against economic uncertainties.
Linde plc (LIN) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call summary indicates strong financial performance with record backlog, increased dividends, and stock repurchase. The Q&A reveals management's confidence in project pipeline, strong EBIT growth in Europe, and strategic positioning for industrial recovery. Despite some bearishness on Europe, long-term prospects are positive. The guidance is optimistic, and strategic investments are ongoing. These factors suggest a positive stock price movement.
Linde plc (LIN) Q1 2025 Earnings Call Transcript
Unknown5-1
The earnings call presents a mixed outlook. Financial performance shows stability with some growth, but economic uncertainties, competitive pressures, and supply chain challenges pose risks. The Q&A reveals cautious optimism about clean energy projects and EMEA margins. Positive shareholder returns through dividends and buybacks are offset by weak guidance and economic headwinds. The absence of a new partnership announcement and the currency headwind further neutralize the sentiment. Given the balanced positives and negatives, the stock price is likely to remain stable, resulting in a neutral outlook.
Linde plc (NASDAQ:LIN) Q4 2024 Earnings Call Transcript
Positive2-7
The earnings call indicates strong financial performance with an 11% EPS growth and $7 billion returned to shareholders. The backlog and new projects, particularly in electronics and hydrogen, suggest future growth. While the economic outlook is cautious, the optimistic guidance and disciplined capital allocation are positive. The Q&A reveals confidence in margin expansion and project execution, despite some regulatory uncertainties and vague management responses. Overall, the positive aspects outweigh the concerns, suggesting a likely positive stock price movement.
LIN Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
