Linde Q3 2024 $LIN (+0.54%)

Financial performance

• RevenueLinde reported revenue of USD 8,356 million for Q3 2024, a slight increase compared to USD 8,155 million in Q3 2023.
• Operating profitOperating profit amounted to USD 2,086 million in Q3 2024 compared to USD 2,052 million in Q3 2023.
• Net incomeNet income for Q3 2024 amounted to USD 1,550 million, slightly lower than USD 1,565 million in Q3 2023.

Balance sheet summary

• Total assetsAs of September 30, 2024, total assets amounted to USD 82,546 million, compared to USD 80,811 million at the end of 2023.
• Total liabilitiesTotal liabilities increased to USD 41,943 million, compared to USD 39,716 million at the end of 2023.

Details of the income statement

• Cost of goods soldCost of goods sold amounted to USD 4,356 million in Q3 2024, slightly higher than the USD 4,314 million in Q3 2023.
• Interest expenseNet interest expense increased to USD 68 million in Q3 2024, compared to USD 40 million in Q3 2023.

Cash flow overview

• Operating cash flowOperating cash flow for Q3 2024 amounted to USD 2,731 million, compared to USD 2,520 million in Q3 2023.
• Capital expendituresCapital expenditures for the third quarter of 2024 amounted to USD 1,066 million, compared to USD 948 million in the third quarter of 2023.

Key figures and profitability ratios

• Adjusted EBITDAAdjusted EBITDA for Q3 2024 amounted to USD 3,253 million, compared to USD 3,037 million in Q3 2023.
• Adjusted EBITDA marginAdjusted EBITDA margin was 37.9% in Q3 2024, down slightly from 38.9% in Q3 2023.

Segment information

• Americas: Sales amounted to USD 3,618 million in Q3 2024, slightly down on USD 3,629 million in Q3 2023.
• EMEA: Sales increased to USD 2,111 million in Q3 2024 from USD 2,105 million in Q3 2023.
• APAC: Sales increased to USD 1,716 million in Q3 2024 compared to USD 1,639 million in Q3 2023.

Competitive position

Linde continues to focus on optimizing its base operations, taking advantage of the economic recovery and seizing growth opportunities in areas such as electronics, healthcare and renewable energy.

Forecasts and management commentary

• Adjusted EPS forecastAdjusted EPS for the full year 2024 is expected to be between USD 15.40 and USD 15.50, an increase of 8% to 10% compared to 2023.

Risks and opportunities

• Linde invests in business growth and shareholder returns, supported by a solid balance sheet.
• The company is also focused on sustainable value creation through clean energy projects.

Summary of results

Linde's financial performance in Q3 2024 shows steady growth in sales and operating profit, with a strong focus on optimizing operations and investing in growth sectors. The balance sheet remains robust, supporting continued investment and shareholder returns. The company is well positioned to capitalize on opportunities in clean energy and other growth segments, but also faces challenges such as rising interest expenses and capital expenditures. Overall, Linde's strategic initiatives and financial health point to a positive outlook for the remainder of 2024.

Positive Aspects

• Sales growthLinde recorded a 2% increase in sales to USD 8,356 million in Q3 2024 compared to the previous year. This growth was supported by price increases, despite stagnating volumes.
• Improvement in the operating profit marginAdjusted operating profit margin improved by 130 basis points to 29.6% in Q3 2024, reflecting successful productivity initiatives across all segments.
• Strong project backlogLinde's project backlog increased to USD 10 billion, including the largest gas sales project in the company's history. This secures future growth and demonstrates the strong demand in the industrial gas sector.
• Growth in adjusted EPSAdjusted earnings per share (EPS) increased by 9% year-on-year to USD 3.94 in Q3 2024, reflecting effective cost management and strategic pricing.
• Cash flow generationOperating cash flow increased by 8% to USD 2,731 million in Q3 2024, reflecting better working capital management and supporting ongoing investments and shareholder returns.

Negative aspects

• Stagnation in volume growthDespite the increase in sales, volume growth remained flat, indicating potential challenges in expanding market share or demand in certain segments.
• Rising interest expensesNet interest expense increased to USD 68 million in Q3 2024, compared to USD 40 million in Q3 2023. This could impact net profitability if not managed effectively.
• Higher capital expenditureCapital expenditure increased to USD 1,066 million in Q3 2024, compared to USD 948 million in Q3 2023. This could put pressure on free cash flow if revenue growth does not increase proportionally.
• Economic challengesManagement statements highlighted continued weak economic trends, particularly in industrial end markets, which could jeopardize future growth opportunities.
• Currency risksThe forecast for the full year assumes a currency risk of 1%, which could affect overall financial performance if currency fluctuations develop unfavorably.