Linde Reports Full-Year and Fourth-Quarter 2021 Results

Full-Year Highlights

• Sales $30.8 billion, up 13%
• Operating profit $5.0 billion, up 50%; adjusted operating profit $7.2 billion, up 24%
• Operating profit margin 16.2%; adjusted operating profit margin 23.3%, up 200 basis points versus prior year
• EPS $7.32, up 56%; adjusted EPS $10.69, up 30%
• Operating cash flow $9.7 billion, up 31%
• Returned $6.8 billion to shareholders through dividends and share repurchases
• Increased backlog to $13 billion

Fourth-Quarter Highlights

• Sales $8.3 billion, up 14% YoY
• Operating profit $1.3 billion, adjusted operating profit $1.8 billion, up 14%
• Operating profit margin 16.1%; adjusted operating profit margin 22.2%, flat versus prior year
• EPS $1.98; adjusted EPS $2.77, up 20%
• Operating cash flow of $3.2 billion, up 33%

2022

• First-quarter 2022 adjusted EPS guidance $2.70 - $2.80, represents 11%-15% growth ex. FX
• Full-year 2022 adjusted EPS guidance $11.55 - $11.85, represents 10%-13% growth ex. FX

Guildford, UK, February 10, 2022 - Linde plc (NYSE: LIN; FWB: LIN) today reported fourth-quarter 2021 income from continuing operations of $1,024 million and diluted earnings per share of $1.98, up 33% and 37% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,431 million, up 18% versus prior year and 1% sequentially. Adjusted earnings per share was $2.77, 20% above prior year and 1% higher sequentially.

Linde's sales for the fourth quarter were $8,298 million, 14% above prior year and 8% sequentially. Compared to prior year, underlying sales increased 9% from 3% price attainment and 6% higher volumes, mostly from the electronics, chemicals and energy end markets. Sequentially, underlying sales increased 2%, led by higher price across all geographic segments.

Fourth-quarter operating profit was $1,337 million. Adjusted operating profit of $1,841 million was up 14% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Excluding the effects of cost pass-through, adjusted operating margins expanded 120 basis points versus prior year.

Fourth-quarter operating cash flow of $3,233 million increased 33% versus prior year and 26% sequentially. After capital expenditures of $839 million, free cash flow was $2,394 million, up 70% versus prior year. During the quarter, the company returned $1,891 million to shareholders through dividends and stock repurchases, net of issuances.

For full-year 2021, sales were $30.8 billion, 13% above 2020. Compared to prior year, underlying sales increased 11% from 3% price attainment and 8% higher volumes, mostly from the electronics, chemicals and energy end markets. Operating profit was $5.0 billion and adjusted operating profit was $7.2 billion, 24% above prior year. Operating profit margin was 23.3% of sales, 200 basis points higher versus 2020, or 270 basis points higher when excluding the effects of cost pass-through. Diluted earnings per share were $7.32 and adjusted diluted earnings per share were $10.69, up 30% versus prior year.

In 2021, Linde generated strong operating cash flow of $9.7 billion, up 31% versus prior year. The company invested $3.1 billion in capital expenditures and paid dividends of $2.2 billion. In addition, Linde repurchased $4.6 billion of stock, net of issuances.

Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, "2021 was another successful year for the company thanks to the extraordinary work of our employees worldwide. The Linde team delivered another quarter of record financial results by growing EPS 20%, operating cash flow 33%, and increasing ROC to 17.7% - all while positioning the company for future growth with a contractually secured project backlog of $13 billion. In addition, the company stepped up its commitment to reduce GHG emissions, targeting a 35% reduction by 2035 and climate neutrality by 2050."

Angel continued, "Looking ahead, the economic outlook remains uncertain. However, I have confidence in our ability to grow EPS double-digit percent from our industry-leading supply network and project backlog. And as I transition to Chairman, with Sanjiv Lamba taking the CEO reins, I'm convinced the best days for Linde lie ahead."

For the full year 2022, the company expects adjusted diluted earnings per share to be in the range of $11.55 to $11.85, up 8% to 11% versus prior year or 10% to 13% when excluding estimated currency headwinds. Full-year capital expenditures are expected to range between $3.0 billion and $3.5 billion to support operating and growth requirements, including the $13 billion contractual sale of gas and plant backlog. For the first quarter 2022, adjusted earnings per share is expected to be in the range of $2.70 to $2.80, 8% to 12% above prior-year quarter. This range assumes 3% unfavorable currency.

Fourth-Quarter 2021 Results by Segment
Americas sales of $3,152 million grew 16% versus prior-year quarter and 2% sequentially. Compared with fourth quarter 2020, underlying sales increased 10% driven by 3% higher pricing and 7% higher volume, primarily in the energy and chemicals end markets. Sequentially, underlying sales were flat, with 1% higher pricing offset by slightly lower volumes mainly due to seasonality. Operating profit of $843 million was 26.7% of sales, 80 basis points below prior year or 60 basis points higher when excluding the effects of cost pass-through.

APAC (Asia Pacific) sales of $1,589 million were 1% above prior year and up 2% sequentially. Compared to prior year, underlying sales grew 10% driven by 3% price attainment and 7% volume growth, primarily in the electronics, chemicals and energy end markets plus project start-ups. Sequentially, higher pricing of 2% was offset by seasonally lower volumes. Divestitures were driven by an accounting deconsolidation of a joint venture, which reduced sales 12% versus prior year but had no impact on earnings per share. Operating profit of $380 million was 23.9% of sales, 70 basis points above prior year or 140 basis points higher when excluding the effects of cost pass-through.

EMEA (Europe, Middle East & Africa) sales of $2,058 million were up 18% versus prior year and grew 8% sequentially. Compared with fourth-quarter 2020, underlying sales grew 8%, primarily led by 6% higher pricing and 2% higher volumes. Sequentially, underlying sales grew 4% driven by price while volumes were flat. Operating profit of $475 million was 23.1% of sales, 190 basis points below prior year or 80 basis points higher when excluding the effects of cost pass-through.

Linde Engineering sales were $946 million, 25% above prior year, and operating profit was $150 million or 15.9% of sales. Order intake for the quarter was $799 million and third-party sale of equipment backlog was $9.6 billion.

Earnings Call
A teleconference on Linde's fourth-quarter 2021 results is being held today at 10:00 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 2021 sales of $31 billion (€26 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 and protect our planet.

The company serves a variety of end markets including chemicals & energy, food & beverage, electronics, healthcare, manufacturing, metals and mining. Linde's industrial gases are used in countless applications, from life-saving oxygen for hospitals to high-purity & specialty gases for electronics manufacturing, hydrogen for clean fuels and much more. 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

Adjusted amounts, free cash flow and return on capital are non-GAAP measures. See the attachments (Earnings release tables: -cockpit.com/cgi-bin/fncls.ssp?u=cb6f854bf5f87d4d3b850b10fac20b09) 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 2022. 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.

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 actual future results or circumstances to differ materially from accounting principles generally accepted in the United States of America, International Financial Reporting Standards or 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, 2020 filed with the SEC on March 1, 2021 which should be reviewed carefully. Please consider Linde plc's forward-looking statements in light of those risks.