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LINDE PLC 8-K Report, Financial Results (May 2, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 2, 2024
Period End
May 2, 2024
Security
LIN
In the record · 2017–202610-K910-Q258-K80

LIN filed 9 annual reports (10-K), 25 quarterly reports (10-Q) and 80 current reports (8-K) between 2017 and 2026.

  1. Material agreement8-K · Sep ’19Sep ’19
  2. Leadership change8-K · Nov ’21Nov ’21
  3. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 8-K filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.

Linde plc (Nasdaq: LIN) reported first-quarter 2024 results on May 2, 2024 that were solid on profitability despite flat-to-lower top-line performance.

Reported sales were $8.1 billiona, down 1% year over year, with underlying sales up 1% driven by 2% price attainment, partially offset by 1% lower volumes concentrated in manufacturing. The real story is margin expansion: adjusted operating profit rose 6% to $2.34 billion, and the adjusted operating margin reached 28.9%, up 200 basis points, with management crediting higher pricing and productivity initiatives across all segments. Reported GAAP diluted EPS was $3.35 (up 9%), while adjusted diluted EPS was $3.75 (up 10%), with the gap driven mainly by Linde AG merger purchase accounting impacts (about $0.41 per share).

Cash generation and capital returns were healthy but tighter. Operating cash flow was $1.95 billionb (up 2%), capital expenditures were $1.05 billion, and free cash flow was $906 million, down from $1,079 million a year earlier. Linde returned $1.69 billion to shareholders through dividends and net buybacks.

Net debt on an adjusted basis rose to roughly $15.5 billionc from about $14.7 billion at year-end 2023, and long-term debt increased meaningfully, which investors may want to monitor alongside the buyback and dividend pace. Adjusted after-tax return on capital improved to 25.6%. Guidance was reaffirmed in the form of ranges.

Management expects Q2 2024 adjusted EPS of $3.70 to $3.80d and full-year 2024 adjusted EPS of $15.30 to $15.60, implying 8% to 10% growth (9% to 11% excluding an estimated 1% currency headwind). Full-year capex is expected at $4.0 to $4.5 billion, including a $4.9 billion contractual sale-of-gas project backlog.

Management noted continued economic uncertainty, though it expressed confidence in the operating model. Investors should note that the adjusted figures exclude Linde AG purchase accounting effects, and that adjusted EPS guidance is a non-GAAP measure.

02—Key points

Key Highlights

  1. Adjusted diluted EPS of $3.75 rose 10% year over year, while GAAP diluted EPS of $3.35 rose 9%.
  2. Adjusted operating margin expanded 200 basis points to 28.9%, with reported operating margin at 25.9%; EMEA led with a 500 basis point improvement to 32.9%.
  3. Sales declined 1% to $8.1 billion; underlying sales grew 1% on 2% pricing, offset by 1% lower volumes.
  4. Free cash flow was $906 million, down from $1,079 million a year earlier, as capex rose to $1.05 billion.
  5. Shareholder returns of $1.69 billion in the quarter (dividends and net repurchases) exceeded free cash flow, with adjusted net debt rising to about $15.5 billion.
  6. Full-year 2024 adjusted EPS guidance of $15.30 to $15.60 (8% to 10% growth) and Q2 guidance of $3.70 to $3.80 were provided; full-year capex guidance is $4.0 to $4.5 billion.
  7. Adjusted after-tax return on capital improved to 25.6%, supporting the company's value-creation narrative.

03—Questions

Frequently Asked Questions

  1. Why is there a difference between GAAP EPS of $3.35 and adjusted EPS of $3.75?

    The difference is mainly purchase accounting impacts from the 2018 Linde AG merger, which contributed about $0.41 per share in Q1 2024. These are non-cash amortization and step-up charges related to acquired assets and debt. Management excludes them to show underlying business performance, though investors should weigh them as real accounting costs.

  2. Is Linde's growth coming from volume or price?

    Mostly price. Underlying sales rose 1%, driven by 2% price attainment, while volumes fell 1%, largely in manufacturing. Margin gains were driven by higher pricing and productivity initiatives across all segments, so the sustainability of pricing power will be a key focus.

  3. Did Linde's cash flow keep pace with shareholder returns?

    Not in Q1 2024. Free cash flow was $906 million, while the company returned $1.69 billion to shareholders through dividends and net buybacks. The gap was funded with debt, which increased and pushed adjusted net debt up to about $15.5 billion from $14.7 billion at year-end 2023.

  4. What is management's outlook for 2024?

    Management expects full-year 2024 adjusted EPS of $15.30 to $15.60, representing 8% to 10% growth, or 9% to 11% excluding an estimated 1% currency headwind. For Q2 2024, it guides to $3.70 to $3.80. Full-year capex is expected at $4.0 to $4.5 billion, including a $4.9 billion contractual sale-of-gas project backlog.

  5. What risks should investors consider from this report?

    Key risks include softer volumes in manufacturing, currency headwinds, ongoing economic uncertainty, and rising leverage from debt-funded shareholder returns and capex. Management also cautions that adjusted measures are non-GAAP, and that forward-looking results may differ materially due to the risk factors described in its 2023 Form 10-K.

04—Continue

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