Full-Year Highlights

• Sales $33.4 billion, up 8%, up 13% ex. FX
• Operating profit $5.4 billion, up 8%; adjusted operating profit $7.9 billion, up 10%
• Operating profit margin 16.1%; adjusted operating profit margin 23.7%, up 40 basis points versus prior year
• EPS $8.23, up 12%; adjusted EPS $12.29, up 15% or 20% ex. FX
• Returned $7.5 billion to shareholders through dividends and share repurchases, up 11%
• Total project backlog of $9.2 billion

Fourth-Quarter Highlights

• Sales $7.9 billion, down 5% YoY, up 1% ex. FX
• Operating profit $1.7 billion, adjusted operating profit $2.0 billion, up 9%
• Operating profit margin 21.4%; adjusted operating profit margin 25.3%, up 310 basis points
• EPS $2.67, up 35%; adjusted EPS $3.16, up 14%

2023 Guidance

• First-quarter 2023 adjusted EPS guidance $3.05 - $3.15, represents 9%-13% growth ex. FX
• Full-year 2023 adjusted EPS guidance $13.15 - $13.55, represents 9%-12% growth ex. FX

WOKING, UK / ACCESSWIRE / February 7, 2023 / Linde plc (NYSE:LIN)(FWB:LIN) today reported fourth-quarter 2022 income from continuing operations of $1,328 million and diluted earnings per share of $2.67, up 30% and 35% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,574 million, up 10% versus prior year. Adjusted earnings per share was $3.16, 14% above prior year.

Linde's sales for the fourth quarter were $7,899 million, 5% below prior year or 1% above when excluding negative currency impact. Compared to prior year, underlying sales increased 7% from 8% price attainment partially offset by 1% lower volumes.

Fourth-quarter operating profit was $1,687 million. Adjusted operating profit of $2,001 million was up 9% versus prior year led by higher price and continued productivity initiatives across all segments. Adjusted operating profit margin of 25.3% was 310 basis points above prior year and 350 basis points higher when excluding the effects of cost pass-through.

Fourth-quarter operating cash flow of $2,095 million decreased 35% versus prior year driven primarily by lower engineering project prepayments. After capital expenditures of $936 million, free cash flow was $1,159 million. During the quarter, the company returned $1,264 million to shareholders through dividends and stock repurchases, net of issuances.

For full-year 2022, sales were $33.4 billion, 8% above 2021. Compared to prior year, underlying sales increased 8% from 7% price attainment and 1% higher volumes. Sales growth was broad-based across all end markets except healthcare. Operating profit was $5.4 billion and adjusted operating profit was $7.9 billion, 10% above prior year. Adjusted operating profit margin was 23.7% of sales, 40 basis points higher versus 2021, or 160 basis points higher when excluding the effects of cost pass-through. Diluted earnings per share were $8.23 and adjusted diluted earnings per share were $12.29, up 15% versus prior year.

In 2022, Linde generated strong operating cash flow of $8.9 billion. The company invested $3.2 billion in capital expenditures and returned to shareholders in the form of dividends and share buybacks $7.5 billion, 11% above prior year.

Commenting on the financial results and business outlook, Chief Executive Officer Sanjiv Lamba said, "Despite the challenging environment, the Linde team again delivered outstanding performance including a record ROC of 22.9%, expanding operating margin to 25.3% and a ninth consecutive quarter of delivering 20% or more EPS growth ex. FX. This resilient performance is a result of our balanced end market portfolio, unrivaled network density and rigorous capital discipline."

Lamba continued, "Looking ahead, the geopolitical and macro environment continues to remain uncertain. However, we are well positioned to win more than our fair share of high-quality projects, primarily in clean-energy and again create shareholder value by leveraging all the opportunities that lie ahead."

For the full year 2023, the company expects adjusted diluted earnings per share to be in the range of $13.15 to $13.55, up 7% to 10% versus prior year or 9% to 12% when excluding estimated currency headwinds. Full-year capital expenditures are expected to range between $3.5 billion and $4.0 billion to support operating and growth requirements, including the contractual sale of gas backlog. For the first quarter 2023, adjusted earnings per share is expected to be in the range of $3.05 to $3.15, 4% to 8% above prior-year quarter. This range estimates 5% unfavorable currency.

Fourth-Quarter 2022 Results by Segment

Americas sales of $3,421 million grew 9% versus prior-year quarter. Compared with fourth quarter 2021, underlying sales increased 7% driven by 7% higher pricing as volumes were stable. Operating profit of $944 million was 27.6% of sales, 90 basis points above prior year and 110 basis points higher when excluding the effects of cost pass-through.

APAC (Asia Pacific) sales of $1,567 million were 1% below prior year. Compared to prior year, underlying sales grew 8% driven by 5% price attainment and 3% volume growth, primarily in the electronics, chemicals and energy end markets including project start-ups. Operating profit of $416 million was 26.5% of sales, 260 basis points above prior year. Year over year cost pass-through was immaterial.

EMEA (Europe, Middle East & Africa) sales of $2,026 million were down 2% versus prior year. Compared with fourth-quarter 2021, underlying sales grew 7%, driven by 14% higher pricing partially offset by 7% lower volumes. Operating profit of $509 million was 25.1% of sales, 200 basis points above prior year and 330 basis points higher when excluding the effects of cost pass-through.

Linde Engineering sales were $562 million, 41% below prior year, and operating profit was $157 million or 27.9% of sales. Order intake for the quarter was $696 million and third-party sale of equipment backlog was $3.5 billion.

Earnings Call

A teleconference on Linde's fourth-quarter 2022 results is being held today at 9:00 am EST.

Materials to be used in the teleconference are also available on the website.

About Linde

Linde is a leading global industrial gases and engineering company with 2022 sales of $33 billion. We live our mission of making our world more productive every day by providing high-quality solutions, technologies and services which are making our customers more successful and helping to sustain, decarbonize and protect our planet.

The company serves a variety of end markets such as chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases and technologies are used in countless applications including production of clean hydrogen and carbon capture systems critical to the energy transition, life-saving medical oxygen and high-purity & specialty gases for electronics. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.

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/c/fncls.ssp?u=3f5be09d7601af234488b9c610a7b6fb) 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 2023. 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, any impairment or other charges related to scaling back operations in Russia as actions are defined and executed and as sanctions are enacted that impact the Company's operations, 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.

Forward-looking Statements

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. They are based on management's reasonable expectations and assumptions as of the date the statements are made but involve risks and uncertainties. These risks and uncertainties include, without limitation: the performance of stock markets generally; developments in worldwide and national economies and other international events and circumstances, including trade conflicts and tariffs; changes in foreign currencies and in interest rates; the cost and availability of electric power, natural gas and other raw materials; the ability to achieve price increases to offset cost increases; catastrophic events including natural disasters, epidemics, pandemics such as COVID-19 and acts of war and terrorism; the ability to attract, hire, and retain qualified personnel; the impact of changes in financial accounting standards; the impact of changes in pension plan liabilities; the impact of tax, environmental, healthcare and other legislation and government regulation in jurisdictions in which the company operates; the cost and outcomes of investigations, litigation and regulatory proceedings; the impact of potential unusual or non-recurring items; continued timely development and market acceptance of new products and applications; the impact of competitive products and pricing; future financial and operating performance of major customers and industries served; the impact of information technology system failures, network disruptions and breaches in data security; and the effectiveness and speed of integrating new acquisitions into the business. These risks and uncertainties may cause future results or circumstances to differ materially from adjusted projections, estimates or other forward-looking statements.

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, 2021 filed with the SEC on February 28, 2022 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.

File: Q4_2022_Earnings_Release_Tables

SOURCE: Linde plc