10-QPeriod: Q2 FY2022

LINDE PLC Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 28, 2022For Securities:LIN

Summary

Linde plc reported strong top-line growth in the second quarter of 2022, with sales increasing by 12% year-over-year, driven by a combination of higher pricing, volume increases, and cost pass-through mechanisms. While reported operating profit saw a significant decline due to substantial charges related to the Russia-Ukraine conflict and the deconsolidation of Russian subsidiaries, adjusted operating profit demonstrated robust growth of 8% for the quarter, indicating the underlying strength of its core business operations. On a per-share basis, reported diluted EPS from continuing operations fell significantly, largely impacted by the aforementioned charges and a higher effective tax rate. However, adjusted diluted EPS from continuing operations saw a healthy increase of 15%, underscoring the company's ability to generate value for shareholders despite geopolitical headwinds. The company also continued its aggressive share repurchase program, returning substantial capital to investors.

Financial Highlights

52 data points
Beta

Revenue

$8.46B

Net Income

$372.00M

4.4% Net Margin

EPS (Diluted)

$0.74

Total Assets

$77.89B

Cash & Equivalents

$3.65B

Free Cash Flow

$1.31B

Financial Statements
Beta
Revenue$8.46B
R&D Expenses$37.00M
SG&A Expenses$771.00M
Operating Income$589.00M
Net Income$372.00M
EPS (Basic)$0.74
EPS (Diluted)$0.74
Shares Outstanding (Basic)501.03M
Shares Outstanding (Diluted)505.27M

Key Highlights

  • 1Sales increased by 12% year-over-year to $8.46 billion in Q2 2022, driven by price attainment, volume, and cost pass-through.
  • 2Reported operating profit decreased by 48% to $589 million due to significant charges related to the Russia-Ukraine conflict and deconsolidation of Russian subsidiaries.
  • 3Adjusted operating profit grew by 8% to $1.99 billion, demonstrating the resilience of Linde's core operations.
  • 4Reported diluted EPS from continuing operations declined by 54% to $0.74, impacted by special charges and a higher effective tax rate.
  • 5Adjusted diluted EPS from continuing operations increased by 15% to $3.10, reflecting strong underlying performance.
  • 6The company repurchased $3.3 billion of its shares in the first six months of 2022 as part of an ongoing $10 billion program.
  • 7Cash provided by operating activities increased by 5% to $4.13 billion for the six months ended June 30, 2022.

Frequently Asked Questions

The significant decrease in reported operating profit was primarily due to substantial charges totaling $993 million in Q2 2022, related to the deconsolidation and impairment of Linde's Russian subsidiaries as a result of the ongoing war in Ukraine and related sanctions. These charges significantly impacted the reported figures.

On an adjusted basis, excluding items like Russia-Ukraine conflict charges and purchase accounting impacts, Linde plc demonstrated strong performance. Adjusted operating profit increased by 8% to $1.99 billion, and adjusted diluted EPS from continuing operations rose by 15% to $3.10 in the second quarter of 2022, indicating underlying operational strength.

Currency translation had a negative impact on sales, decreasing them by 5% in the second quarter of 2022 compared to the prior year, primarily due to the weakening of the Euro, Australian dollar, and British pound against the U.S. dollar. This effect was also seen in segments like EMEA and APAC.

Linde plc is actively returning capital to shareholders. In the first six months of 2022, the company repurchased $3.3 billion of its ordinary shares under a $10 billion share repurchase program approved in February 2022. Additionally, cash dividends paid to shareholders increased by $75 million compared to the same period in the prior year.