Wiesbaden, April 26, 2006 - The technology group Linde has achieved significant increases in sales and operating profit (EBIT) in the first quarter of the fiscal year 2006 and confirmed its forecast for the whole year. "We have taken advantage of the good economic environment and have begun the new fiscal year at full pelt" said Professor Wolfgang Reitzle, President of the Executive Board of Linde AG. "We have established an extremely stable base for the continuing success of our business in all areas and we are approaching the challenges ahead with a healthy dose of optimism. We confirm our previous forecast for the full year 2006 - we expect Group sales and earnings to exceed the figures for the prior year."
On a comparable basis*, Group sales rose 14.0 percent to 2.415 billion euro (2005: 2.118 billion euro). While sales outside Germany increased by 14.8 percent to 1.938 billion euro (2005: 1.688 billion euro), sales within Germany saw a 10.9 percent increase to 477 million euro (2005: 430 million euro). Incoming orders of 2.533 billion euro were also higher, 7.9 percent above those for the same period in 2005.
Based on comparable prior year figures, Linde's earnings also continued to show a significant improvement. In the first three months of the year, Group EBIT rose 36.4 percent to 225 million euro (2005: 165 million euro) and earnings before taxes on income (EBT) increased by 48.6 percent to 208 million euro (2005: 140 million euro). Operating cash flow increased by 77 million euro to 214 million euro. Net income after minority interests of 134 million euro was 50.6 percent higher than the figure in 2005 of 89 million euro. There was a corresponding rise in earnings per share at the end of March to 1.12 euro (2005: 0.75 euro).
All business segments contributed to this very good overall start to fiscal 2006, with each segment achieving a disproportionate increase in earning power.
Sales in the Linde Gas division increased by 16.1 percent in the first three months of the year to 1.198 billion euro (2005: 1.032 billion euro). During the same period, EBIT rose 20.0 percent to 192 million euro (2005: 160 million euro). This significant improvement in earnings was partly the result of the successful implementation of the GAP (Growth and Performance) optimization program, which was launched in the course of 2005.
Linde Gas achieved double-digit growth rates in all product segments. In the on-site segment, sales rose 30.2 percent in comparison with the same period in the previous year to 293 million euro (2005: 225 million euro), bulk business saw a 15.2 percent increase in sales to 326 million euro (2005: 283 million euro), cylinder gas sales rose 10.7 percent to 434 million euro (2005: 392 million euro) and the Healthcare segment saw sales growth of 12.4 percent to 191 million euro (2005: 170 million euro).
In the most important market of Europe, Linde Gas increased sales in the first three months of the year by 11.4 percent to 809 million euro (2005: 726 million euro), benefiting above all from continuing strong demand in Eastern Europe. Linde Gas also achieved significantly higher sales in both North and South America and succeeded in further expanding its business activities. With a 47.2 percent leap in sales to 53 million euro (2005: 36 million euro), the division again achieved its highest rate of sales growth in the Asia/Pacific region.
In the course of the next nine months, Linde anticipates positive developments in its industrial and medical gases business worldwide and expects Linde Gas to achieve increases in sales and earnings once again for the full year 2006.
After its record year in 2005, Linde Engineering has made a good start to fiscal 2006. Although sales, based on billings, did not quite achieve the same levels as in the first quarter of 2005 (2006: 316 million euro, 2005: 357 million euro), EBIT improved in the same period by 12.5 percent to 18 million euro (2005: 16 million euro). There was continuing evidence of growth in incoming orders. Once again, the division exceeded the very high level achieved the previous year of 465 million euro by 8.0 percent, reaching a figure of 502 million euro. As at the end of March 2006, Linde Engineering had achieved its highest ever level of orders on hand of 3.477 billion euro (Dec. 31, 2005: 3.305 billion euro).
The positive trends in plant construction were the result of the continuing high level of global demand for air separation, hydrogen, natural gas and olefin plants. Linde Engineering is outstandingly well-positioned from the technological point of view in these product segments and therefore has a good chance of being awarded further contracts following future invitations to tender. As a result, Linde remains optimistic about its prospects in the plant construction business for the current fiscal year 2006 and expects further improvements in sales and earnings in this division.
In the Material Handling business segment, Linde has successfully pursued its income-oriented growth course based on the GO (Growth and Operational Excellence) optimization program and has performed exceptionally well in the first quarter. Sales increased significantly by 19.6 percent to 922 million euro (2005: 771 million euro) and incoming orders at the end of March of 960 million euro were well above the comparative figure in 2005 of 854 million euro. Earnings trends were even more positive. EBIT rose to 47 million euro (2005: 26 million euro), which represents an improvement of 80.8 percent.
Linde also benefited from a favorable market environment. Especially in the important market of Western Europe, demand for industrial trucks increased at a surprisingly high rate of 12 percent in the first quarter of 2006. The Eastern European region again generated the highest rate of growth at the beginning of the year. The total market there increased by 46 percent compared with the same period in the previous year.
It is anticipated that there will be further robust growth in the global market for industrial trucks during the rest of the current fiscal year, with a disproportionate increase in demand in Eastern Europe in particular. In North America and Asia too, the rate of growth is expected to accelerate slightly in the course of 2006.
Given this situation, Linde again expects an increase in sales in the Material Handling business segment for the full fiscal year 2006 and a significant improvement in earnings as a result of the GO program.
Please click on the link below for the Linde AG January to March 2006 interim report:
English version http://hugin.info/125064/R/1046759/171893.pdf
German version http://hugin.info/125064/R/1046763/171896.pdf
* Prior year figures have been restated to take account of amendments to accounting standards.
Linde is an international technology group which has a leading market position in both its business segments, Gas and Engineering and Material Handling. In fiscal 2005, Linde achieved sales of more than 9.5 billion euro and it currently employs around 42,400 personnel worldwide.
N.B. To coincide with the publication of our quarterly report, a teleconference for analysts will take place today at 4pm (German time) in English with Dr. Peter Diesch, Chief Financial Officer of Linde AG. You will be able to listen to the conference live if you dial +49 (0) 69 58999 0509. Please tell the operator you name and the name of your company.
Following the teleconference, you will be able to hear a recording of the event by calling +49 (0) 30 726 16 7224. Please give the following reference number: 701169.