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Linde PLC Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- Operating profit at $2.5 billion grew by 9% and resulted in a 29.9% margin, primarily from management actions around price, cost, and productivity.
- Linde increased its active low carbon and renewable energy consumption by 19% YoY.
- The company expects to be announcing new projects and customers in the near future.
- The company expects to continue growing in industrial gases, not just megaprojects, and to keep an eye on smaller opportunities as well.
- The company is confident that its EPS growth will continue for the years to come, as it has historically contributed 4% to 6% EPS growth.
- Metals and mining are expected to be negative YoY due to demand and large turnarounds by customers.
- Volume growth was flat due to lower base volumes in EMEA.
- The company has not seen any improvement in private consumption.
- The company has work cut out regarding unfavorable FX translation.
- The company expects metals, manufacturing, chemicals, energy, and lower volumes versus the previous year.
- Margins are expected to continue to improve in Americas and APAC.
- Margin expansion is expected in 2025 for Linde Plc.
- Metals, manufacturing, chemicals, and energy are expected to be softer and lower volumes compared to the previous year.
- The company expects to create shareholder value through its time-tested execution culture, disciplined capital allocation, and proven management actions.
- The company expects to continue to contribute 4% to 6% EPS growth from overall capital allocation.
Q&A Highlights from Linde PLC Earnings Call Q4 2024
- Analyst asked about the impact of political noise on potential project partners.
- Sanjiv Lamba stated that the company has seen project partners taking more time and applying more rigor before going to FID, which is a good thing for multibillion dollar projects. He also noted that there is uncertainty around the regulatory framework and requirements, but the company is confident that the 45Q provision, which predates the IRA, will remain intact. He added that the company is seeing people being more rigorous in their approach before making a final call on investing capital.
- Sanjiv Lamba stated that the company has seen project partners taking more time and applying more rigor before going to FID, which is a good thing for multibillion dollar projects. He also noted that there is uncertainty around the regulatory framework and requirements, but the company is confident that the 45Q provision, which predates the IRA, will remain intact. He added that the company is seeing people being more rigorous in their approach before making a final call on investing capital.
- Analyst asked about significant new FIDs in electronics on the company's side over the last couple of years.
- Sanjiv Lamba stated that the company's electronics business is executing on projects as they speak and will be announcing new wins very shortly. He also noted that electronics accounts for 20% of his all-time record sale of gas backlog and that the company is more than happy with its position in the electronics market.
- Sanjiv Lamba stated that the company's electronics business is executing on projects as they speak and will be announcing new wins very shortly. He also noted that electronics accounts for 20% of his all-time record sale of gas backlog and that the company is more than happy with its position in the electronics market.
- Analyst asked about the impact of a large non-recurring helium sale by a competitor on the helium market.
- Sanjiv Lamba, CEO of Linde PLC, stated that the helium market continues to display the same characteristics as it has for most of 2024. He said that there are parts of the world where helium is in short supply, such as Asia, and that the demand side on helium remains flattish. He also mentioned that pricing remains stable and that there are shifts in helium supply and demand all the time, but nothing new that would impact the market.
- Sanjiv Lamba, CEO of Linde PLC, stated that the helium market continues to display the same characteristics as it has for most of 2024. He said that there are parts of the world where helium is in short supply, such as Asia, and that the demand side on helium remains flattish. He also mentioned that pricing remains stable and that there are shifts in helium supply and demand all the time, but nothing new that would impact the market.
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