LIN - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2020 Linde earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator like conference now speaker to hand Mr. today, to would over the your I Pelaez. Juan begin. may you Sir,

Juan Pelaez

section. website Thanks available read Chris. webcast. on Sanjiv Officer and two everyone are numbers I statements Chief reconciliations third Today's note Pelaez, Good Executive will Matt morning Officer. quarter of applies Lamba, am Investors quarter Please disclosure on The Linde's our the for on questions. Head an and we the Steve materials at White, performance adjusted all of that by be in presentation earnings Chief XXXX now forward-looking joined attending give page Officer, this linde.com Operating call will the to Steve made statement teleconference. the then and Relations Matt in during and and appendix this Investor the of available I answer our morning Juan and update am slide of are and thank Angel, presentation. it you to Financial Chief this

Steve. me call the over turn to Let

Steve Angel

and good everyone. Thanks Juan morning

Another and about pandemic. our operating and who outstanding And been team Linde this doing the filling have customers, products, they taking plants that all care delivering been servicing of plants, of employees have thinking am building performance cylinders, the from beginning I by especially worldwide. patients uninterrupted

record growth last deliver operating of quarter better and all were see very cost statement. volumes this XX% in our delivered year, We year on strong margins growth to we top we guidance, can expect achieved down gas ex-FX. for leverage performance income full which the You and by segments, financial fourth to our on management the price able earnings per good driven quarter. share XX% we Based

end more perform volume And pre-COVID the have in levels. versus more but improvement below the us we freezing showed segments fixed from protected markets Geographically, food reductions well. all fee markets. our expected, volume continued and cyclical healthcare, QX resilient serve, remain electronics to contracts still As

the and be expect both in in led QX, Korea, to year-over-year. sequentially China, and Asia, Taiwan Going positive, volumes I by South

see rise macroeconomic a cases at in The pronounced what out remain data Americas elevated as with to impact is flattening and lot published continue of hearing interest other from regarding we I This both in is and Europe and or COVID is manufacturing levels. sequentially, know metals However, grow consistent market segments. there XXXX. our are you with companies. most the

acknowledge am wild COVID bit point. model, card is What have supply a business demonstrating. we of the this our think we a is will integrated of which all clearly at I I confident been in resiliency

environment, ability ongoing efficiencies achieve any to an achieve of ability strength Our on in the our cost positive to and backlog our pricing basis.

will that volumes, all stable we provide you is I This earnings Assuming earnings XXXX. confident of on year our next deliver can with will outlook today, call. but another double XXXX in on more detailed a we digit am growth share

basis gases has and supply is about leadership, who Under industrial density career Operating three different greenhouse administrations gas Sanjiv. our APAC fair Chief call XX% us a on our on can clearly tracks improved three Linde upon AG integration is XX% and announced beginning legacy towards February. a A our XXX entire are a in goal and was in modes geographies. You network our digitalization scheduled advocate over been deeply He year, integrations. way last rollout benefits operating with our merger, AG our by is Linde initiatives. chart baseline knowledgeable and say, versus goal. of achieving his has cost margins With good the the and the well of the all to-date packaged against survived efficiencies, has then between in strong our to intensity gas and in He core industrial over building substantial that the of today appendix Officer. XXXX PLC. Lamba see reduction and thrived in in strategy With Praxair new ahead his for we driven the points announced and The It major two site, Asia has for Lindy he generated performance completed is gases, recently we two spend price Sanjiv of reduction BOC, management on we of bit years, company. little merchant

our of and the entire indication were results, population. the which Asia of positive the employee merger Another is success Sanjiv's quite survey across leadership

our of and is XX% side, Sanjiv's project the were in of a sale today result gas as projects many of won backlog of On those leadership. Asia

energy, been In terms strong of advocate. clean Sanjiv has a

diligently activity the region more in areas. staunch expect our a corporate Sanjiv world. continue meaningful sustainability. results. our first integrity, him community And safety, project to of diversity, today improve to part to performance Asia and Asia be to have work has we expect where all We other in And I been values, of than I all supporter see any of the these

Danbury, APAC functions. and say on to will announcement, With turn operating Lincare Engineering, relocate as And it Linde regional responsible global he well and saw to you I words. will that the over Sanjiv As Connecticut. EMEA will the to few a as for be segments, Sanjiv Americas,

Sanjiv Lamba

everyone. vote opportunity morning the good and Directors. be really Steve to entire I wanted and and given appreciate I of confidence this from the Board of Steve Thanks

I for team around and is to the exceptional high uniquely operating culture Steve, our to As results indeed a quality industrial technology our and world strong closely Line with our on sustainably while leadership some and world space, drive creating Steve indeed company an shareholders. say sharp and its generate that positioned focus a laser pride can talented making value productive. also forward and leverage with I today for growth the efficient, more Linde said, employees quality customers believe XX-plus look with to our sustainable working my to continue I growth in to shareholders. years more is gases our our planet with the

As over most not I a meet of hope I the virtually, I least to will it outlook. in transition turn role, the Matt to month. you, at performance to get new the chance into coming and to discuss QX

Matt White

Thanks everyone. good morning Sanjiv and

Americas. third be contribution offset X% from as down volumes The the slide on Sales in year, lower $X.X project three. but prior X% quarter and base prior in startups year, were volumes, X% results were more positive sequentially. can below Versus found than billion higher primarily end-market, manufacturing of APAC

exact second Pricing actions with quarter. prior higher prior year, X% pricing increases over as management X% from due to were in has mid as inflation. to took food estimate chemicals the year down timing from flat refining we effect recover second QX increasing decrease. more year-over-year the be X% impact COVID, digit equipment X% solid positive geographic was improvement achieved trends with cost Despite consolidated percent project the had While lower and and level, quarter. All to and a cyclical over the we be segments markets sequential the at backlog it's of of of engineering the gas the volumes, local difficult to a This single know the and At recovery with beverage, but manufacturing. sales metals volumes continued held from sale to $X.X billion. and steady primarily relatively the

the You Chinese as Sequentially, rose from a revenues a weaker will from was payments. of tailwind notice operating and most dollar X% sales profit XX.X% currencies. was FX end-markets Operating XXXX profit that from X%, Latin resilient by to the currencies. the X% form of prior due mostly of stronger pricing, foreign across $X.X defensive and year-over-year FX impact primarily offset and sequentially. higher or management Versus fixed Euro and RMB, American cost in contract a XX% of billion combination grew year, depreciated

points fact, and quarter from from operating XXX basis increased volumes. expanding margins basis basis margins on XXX our the leverage XXX margins fifth grew points. In profit operating row of higher XX% strong XXXX, more a Sequentially, than points in profit expanded

ratio consistently CapEx of cash Diluted resulting which business digit the culture cash disciplined end-market and our CapEx, performance operating industrial sequentially. fixed that which companies to of a increased unique increased rising claim don't higher evidenced return many $X.X material you on primarily a Base performance find I high flow a in represents protection spending, Equally of including and model. can projects, Linde growth in continued than of growth non-backlog upside be resilient with deployment, has investments is higher cash an the XX% important trends. quarter. high smaller double year prior has EPS capital flow quarter, and recovery. a this QX combination the the and or Frankly, on-site and and of all percent was serving end-markets this paper demonstrated economic to second downside prudent expect EPS year-over-year quality year As business by XX.X% prior can yet manufacturing will potential XX% capital, cash on speaks glass. reached flow of EBITDA both to quarter, found from payments $X.XX in which operating from this and conversion record earnings our of confirming flow the validation environment, Further XX%. billion

over startups. primarily growth $X CapEx, declined However, spend project to which with represents contractual million, due has

quality start of anticipate and ability similar a cycle customers our the XXXX. up record and XXXX While But time projects we our in trends corrections. rebounded backlog growth to and spending year led saw the the to contracts, backlog decline those speaks XXXX project following following overall significant do to recall to in to into including corrections, capital XXXX, I customer on subsequently

recover the lead diversification, for properly to prudent using investment a have of within capital and contract will Poor balancing return. misallocation on ultimate consistently can growth demonstrated investment. is industry expertise, management initial capital and losses, cash laser history than I proven balance explains expect to consistent a growth network future this and and cycle a greater a is potentially our on provide the quality. Linde the metric guide, This why eventually Return opportunities. and CapEx risk supply as integrated significant So core process focused stay dense of even while we

From you want a a four. quarterly as doubled. grew fund years, under results funding has has our QX capital deliver would we discipline. performance XX% be Yet, high XXXX wasn't demonstrates and cash find. just top billion by of increased expanded distributions, our basis XX%. believe our by growth excess we to and This points also cash half growth to generating enables exactly that's free it's shareholder Furthermore, only solid high up while capital note And financial this It's itself. will repurchases. flow longer find merger slide and looking EPS cash dividend growth. including a quality to is increase third on a while XX% managing on the important more of that when of flow I had In that just our distributions. EBIT Most performance, Now in quality it quarter date. basis share you this from over $X margins year-to-date return XXX and points two growth performance shareholder since which XXX a important accomplished operating financial and than pleased with and with what we The companies owners commitment range to merger perspective, company prudently focus. XXXX, the slide trends, can at capital discuss of

these are We integrating issued all forget people during XXXX two global multinational our detailed tend through reduction values companies to in a that and report complex safety are carbon July. sustainability which results performance, our was diversity in improved achieved Many that employee pandemic. while we core living

wrap we fact, I would with which look what while next. our we up to successful, can you some continue updated slide now be will I on things In stated find forward accomplish to XXXX five. guidance not will

$X.XX. quarter, fourth range the of we are estimating For $X.XX to the EPS in

FX to XX% headwind assumption, XXXX. the this XX% over represents X% growth range Excluding

estimate offset mostly flat We $X.XX, which range pandemic contribution the to and estimated February volumes be is XXXX believe $X.XX an pre-COVID and this subsequent expected impact. of project to around light Full This are sales $X as X% incremental in FX seasonally We within uncertainty guidance our $X.XX. is headwind. economic year engineering lower the by continued range timing. project of includes anticipating sequentially falls to updated is appropriate now

are commitment. we to and full challenges, global the call Q&A. of thus ex-currency irrespective summary, in on over grow So year XX% like to I original now to deliver our XXXX expecting would the turn EPS financial

Operator

Instructions]. [Operator

comes of question Duffy first from Barclays. Our Fischer

open. is line Your

Duffy Fischer

Yes. morning Good fellows.

it would that? that because there showing of be disease? that's slide in got Could the COVID in headwind when transitory respiratory earning profit was to the integration? that you might the companies? margin go just you improvement just Maybe you talk maybe better four, How the become in something a like over might respective a was be Lincare business price? is could think overcome this Matt contributed or the size might How to we a just And at from is How there either cost-cutting just to that So in if base buckets question, we would need year as base than year from? grow First that much anything so to a or about there expansion. in keep to was now? left-hand slide that chart of that the anything much that upper much was on, corner then

Steve Angel

that, get year-out, going some answer go frame, high any is headwinds, if year-in, back to this level. X%. are time have the the probably then sure some I you was and this am quarter-out, execute. Pricing tailwinds Duffy, the We in I this. in team a have And year you always at to I an you the just of it Well, go every always you would the element business. to year, is think And is, rest of about maybe are got executes quarter-in, of month, given pricing going way point

going will forward We well. get it as

And on a look as I you several merger think that synergies I of is COVID. rearview about this a is as last don't efficiencies important the every through which cost in some because working good factor. frankly, cost of earlier, because did have then result in us, to Certainly anymore we spoke quarter, very quite right now, So that's quarters, at which, are kind business. mirror we just management

I to sustain to management, our continued continued cost which will I operating us up we and And drive programs productivity ramping confident continue more comes whatever kind what volume in said that am ability towards price so is improvement, forward. margins And what going our of been have good here way.

think volume be a of translate I down take margin that some way all seen we -- healthy project we income it levels contribution to were to. have into backlog ever that we to of look And QX QX, large and to higher fairly from the course, you able have will forward the And statement. today.

a for us while. sustain will that So

are upper So we will left-hand referring side. the continue that trend that to you

Duffy Fischer

could and Perfect. walk looks just you the maybe And if you at look how and and and there today? merchant package what seeing then, kind through of three that geographies volume-wise big are

Steve Angel

impacted Well, I is think package more by manufacturing.

So has segments. market suffering globally more than been other so manufacturing

States, I and the if of gas. see inside for at would that look example, hardgoods you number weaker is if So that United looked than you

much double But negative side, So volumes. single you negative year-over-year have hardgoods low gas probably still digit. would on it be digit the say better,

those have of kind you So trends.

merchant is. be often the resilient On it it side, markets, affected can by

large would back. Asia, quite look well, and the Europe, Matt liquid the look at in So electronics to as electronics provide fence, all can and those that the you and very in healthcare, that then chart at in if see And as markets we up if holds too, were over do not it's see well. markets about held U.S. markets food us markets merchant you and end-market have were up to for you spoke freezing are you

resilient merchant, exceptionally little end-market of weaker would exposure. because structures held In Package both cases, generally well. speaking, fee be have fixed manufacturing. of because a So better the the gas up

Duffy Fischer

you. Thank Great.

Operator

Thank you.

Bob from Sachs. of next Koort Our question comes Goldman

open. is line Your

Bob Koort

and it about market. little opportunity? or high with Is you exploiting with to description with hydrogen to you it or [ph] something guys fits returns investing you do a can much. a wanted wondering core on asking been of Steve to Obviously going very rifle more that this market capital you lot about of your bit dense how shot, here. how itself network? But your as Matt, think are lend Thank in, there's fanfare about you I ask Matt,

Matt White

most I are we we focused supplying. very often, customers shots presence, cases, in know, on already would end-market infrastructure, customers say shots, based rifle end-market

to That's fence is gas me, only And like normal projects. The clean fare is industrial the much only difference. the difference look so the these product. over very hydrogen the

Steve Angel

Bob, view it, Yes. risk can intensive that, you to we And an And as and to that. our growth to imagine just manage get asset is relative as good returns add that's, to it's on area. strength the these assets

industrial different very rest So business the how don't gas of all runs is at and see we the operated. that on

Bob Koort

then the the and succession. longer? on read you That's the out helpful. into I future? there a planning some for a on we that time Should rely was heading distant a at was you Thanks. at so for he are And only you Steve, can Or home this year in sticking not there named last guys know while about we COO, point

Steve Angel

One rest or day decided here. you I nothing is will not be head assured, day I out, but will one planned. there But can

Bob Koort

Okay. Thanks.

Operator

we of Up next, you. Generale. have Clark Peter Societe Thank

open. is line Your

Peter Clark

we guys. you. have Linde you took be say Obviously Sanjiv. of But PLC in got XXXX, the pandemic adjusted a am the obviously it? were in back And because Praxair, main follow-up is clearly at Steve, PLC, the February. for at Sanjiv everyone. to I query productivity guidance. would like the key see guiding differences was then top to and and Thank a are the And BOC? back same has told And think then adjusted you, would Asia across volume the even of thing. Thank has would Linde against has see mark you a Good you. wondering had just AG world. hit, much the way the were been very anyway to the to QX that bigger terms end, Linde the terms Hi how the for organization way develop this, in i.e. productivity pretty we the you adjusting as you I quickly morning Obviously, as the way benefits. you way it that I off welcome, perhaps since on quick difference you

Steve Angel

question and So needed the to to about frankly, was people that need. that what I turn challenges of whether patients. take do over board, Quite will There the India Linde recent hoops take at to the in all across I hospitals then those to they COVID article oxygen address did and to PLC first in part Sanjiv. a drivers to provide jumping of team through care our did what was our will

So across that's a really There of is no terms say there stories the organizations. cost legacy management everybody the and what board. hundreds in like people would is standpoint, that. But I to did differentiation stepped up just of really challenge from

Sanjiv Lamba

productivity past Thanks It as we go on as And through now and of overall the and doesn't benefits build in do It's separate fits There we of that embedded. seen are productivity top. what entirely kind something AG in have a that I see part within PLC, an the It we in business. is, or sit that's efforts productivity thousands and Linde Linde on Peter. main would think what business. piece between My there. really these the It's on like In from that a observation are have It's fundamental difference not the in fundamental initiative something we we I we run going I our process. everyday. PLC. projects have business find might of this. the difference that's Linde the the see program deliver

Peter Clark

you. Thank

Operator

you. Thank Instructions]. [Operator

Tang we of Nicola BNP. Next, Exane have

open. is line Your

Nicola Tang

congrats, questions. Thanks taking on thanks the my the everyone. for for presentation promotion. Hi and And Sanjiv,

is XXXX. were delays And the talk commenting when slightly. second CapEx about buyback. the all you then backlog your taken moment? you wondering to want I Is very And related Should spend? Or your into you at that I guidance, if to decline there? existing as pause non-project existing on that in the to I it And I could was the revised look the Matt, question I backlog. I or backlog you do at have had backlog see a in your project any cancellations? about low-end delays a talk down in well? Firstly, remarks, see at

Steve Angel

I your first Most Matt Well, keep you likely. and and handle heard most I one haven't I let question yet, going take will the likely, the will but second one. can

Nicola Tang

Okay.

I of $X.X previous about you The know in you around I think, second $X QX. February lower restarted And billion you XXXX. seems bit the QX, remaining. than of a by my correct, question buyback was, if I think pace original billion but is commitment paused calculation was be to in buyback, It months. the that it have the in a

the timeframe perhaps So still equity perhaps to bit are I for was within Or pace, market be whether XXXX? wondering projects? conditions more are you February related this completing if decaps or original market of to the practical to you related or committed trying to a the about

Steve Angel

Okay.

the on the So this is part, Steve. backlog. take I first will

So projects the that into projects started and backlog. backlog the number backlog we publish we is a which the come that comes of function out signed up that have of have

the started got have so the up next spend it will likely rate. based that's be that we a our on are an terms it the backlog, saying get those up you and But we of best CapEx we can starting starting returns. why we Matt kind from when down. projects divorce is was could we we revenue seeing will the what right. add closed come could we look number start is, But going so projects are That's that based good of up estimate projects at so annualized amount and thing, to or in on and we year And that to to replenish

because also Now lumpy. this bounce is some it could around again,

if to. coming referring where and reasons is quite we are really you come going we just So aware in strong And very for electronics where of from, they to that are is that's all projects really think are of. or terms think what much he from

to don't when function say, projects. I back, comes earlier a And are the point rest back. Matt's balance going all like It's comes to that of is know right timing. looking pipeline of of fairly are pipeline over Clearly, but kind into becoming clean of more a was project opportunity system. goes are demand projects quite would electronics to I energy, to we There of the they other of a few much kinds the very really than businesses do projects is are demand which would demand. anything, But their then further of opportunity to compared about. wait this if that at And have until what we customers stronger flow sheets, to respect slate talk So back question the weak. With we now in time. see back mild seen, delays, expect what way delays tend you have others heard their

We little confident that a respect of, with is about those I CapEx strong. seeing And will battery projects, But CapEx that inside with spend, don't we projects, project would to CapEx all respect to anticipate start and the And I happen so spend. really non-growth we the the are to would spend growth really big mean pursuing. we the opportunities continuing feel in glass, the we I non-growth say, on-site with the pipeline any with have to day, refining quite benefits all small projects, base pretty further as pulp good set respect that would which more lithium-ion are investments. from there, projects and closely, delays. about savings had manage the every closely number, always status lower certainly, we what just of number, is of we on more today. been when commercial certainly very respect to paper expected here that we This focus

a COVID. very throughout that so trend has been And favorable

Matt White

Yes, Hi to Nicola. add before I Thanks just will go I to Steve point buyback Stephen. question. one the

think. I

industry. definition Just definitions to consistent are not clarify the this backlog, in too, of our

$X type So we the you secured contractually be stringent understand we LoIs. put on opinion, make means must that, my most in must It define over don't definition We It want how put don't put we don't be growth. MoUs. I to It merchant-only backlog. just million. sure We projects. have

within our even half CapEx point, for good is Steve's spending, and growth growth. to that little than of very a less So for base

of below markets some $X like and million, For on growing like some strong paper. were in other put sites glass small these places on-sites

seeing a may good risk lot but We that good are we also pursuing. backlog things are of the to meet we not opportunities and see returns there growth our definition in relative

just we pursuing think the are wanted substantial but what there on also sure our the fits portion growth, capital is make I to that are elements. There have growth there stringent CapEx. when of So you a about we spending two we that fairly definition, then is are backlog in base

Regarding the share points couple buybacks, yes, to make. just a

how more they First, an at part policy. European too integral I our look that's the deep technicality buybacks of into about are allocation That's is In wouldn't that, the capital that expiration, a look into under reality, MAR think a we requirements. February. required of I think better to way

it's always is tend grow As to every priority that, our growth. you the after and we to dividend And in year. It have left to A buybacks. excess to maintain projects. probably always lot of with capital that then we decaps, then a invest to be could know, look and our be acquisitions, could that and well over capital, But be rating grow goes could excess

So have programs. open to expectation is buyback continue our to

items opportunities time $X approach than we be this in heavier in the about be at something the and have the up. is that see discussed integral with quarter, far at just market market bit obviously an now that As every And part then when light capital our day we were of is of a our since we you we as been this August, QX. we to the policy. But every for back something off will started But track go turned as less a in COVID, that allocation since it day times. on we in is probably billion, little know, will we why

Nicola Tang

right. All you. Thank

Steve Angel

do anymore have we Chris, questions?

Operator

sir. Yes,

from Next question David Begleiter. is

David Begleiter

case. there concern Americas Thank didn't might refining that be margins. impact appear the your and some weakness in you. That were result to Steve,

you well? about in in drove what talk can margin Thank QX with refining QX and the you. in expansion So strong business what Americans your as happened

Steve Angel

Okay. Yes.

part what of said? a may Is the first is that margins. you have So hurt that our Because your is, concern there was question kind refining of -- I

David Begleiter

the In yes. Yes. Americas,

Steve Angel

Okay.

a So region. it's big Americas,

elements But me XX% So I lot it. of there is think operating say, bad. let obviously margin is a not just to

there? team we did pricing, good of quickly. we how management, had So very finished earlier. the out And cost get We integration some opportunities good reacted

the structure, always fee been of So benefits period. we of up very certainly the this take-or-pays, that. throughout Americas has The strong all well that programs. fixed very saw productivity And held some on

respect So what end-markets, we and earlier. Americas, in freezing, is are look, QX I that's the to we from They that of With resilient healthcare, certainly up are -- well hurricanes that talked QX. year-over-year. down, as those Lake There a series refining, because the the of about markets. obviously sequentially in some were volumes as I from Charles. food certainly in affected very in doing noise that predominately benefit really And

hurricane affected The first Motiva.

that had be, recovering been So from needed to recover to and have they they from there that.

and year-over-year, a again even contracts all there we But it those looks protect better, September in down that conditions though October good we So save is have very were, commercial little us. terms obviously down reason. for of that

there just And is so and execute. headwinds as to said earlier, we I things tailwinds again always go and have

tailwinds. is never nothing So quarter but a have yet where I seen there

The had between don't during now. that pretty I job. team just a did are of of that So deal quarter But year. much out anticipate now with. very the one hurricane headwind to we we rest and the another good was

has refinery But good from gas margins know, and start has issue the typically fuel has weak coming they fuel up been for that good are make I though The not terrible. been that was. But good be you in very where back diesel be biggest making is So much think fine. we utilization coming it been is been as strong, They the pretty has jet money. shape. where need place in will than to them. higher to is side refineries low-XXs The side refining,

David Begleiter

QX for you And just the European anyway Have guys? quantify lastly, Steve, And impact to on shutdowns. any seen in yet? you impacts the

Steve Angel

the closely these at started been Well, and we think But medical is, have oxygen of look quite because into a volumes it, to strong. that think, I to is I that Clearly, it's watch shutdowns going I pretty effect. see lot really answer strong. can have

that strong it a of up. I continued case expect The And function go be October. our see rates And rates. COVID typically in oxygen sales so COVID case is to go up, to

strong. there been probably believe build these were coming. that shutdowns that's ahead, I knowing was some So

quarter. why we are were saying we a advance better volumes in flat preparing would think for get this going I of shutdowns. this people is are the in to got the But little because ordinarily rest than the for QX we effects we sales the as probably So see of

that it sure, to going but to would the drag will We we to be are be though continue flat, throughout. be, a around be I are the volumes am and Europe confident certainly will medical in shutdowns they strong side, anticipated

David Begleiter

Thank you.

Operator

you. Thank

Markets. John Our of comes McNulty next BMO question Capital from

open. is line Your

John McNulty

for taking question. my Yes. Thanks

little than how But for around activity? a deeper every and differences way at think, recession. maybe about your question potential I think one there of XXXX was is about point? guess, back how think to you progression improve, recession may it this a the different. a to recessions? this your little bit the start bit that are how to about the backlog look, have thinking backlog to snapped just given And actually I more seems in when So or quickly. Is obviously the maybe a backlog

Steve Angel

that. to It's forecast hard for me

going are there. projects to be electronics think I

pretty confident about that. So am I

I working of these If again, CapEx internally. the years, what the of on that loose. probably John. remains billion have of forward? projects projects track, think I it's we of clean really that's are timing projects. that. exceeds of of the dollars. pace? break based my on here of to go likely we that's of is But energy. all think respect at think, to these about the some a how But well function I we expectation many reasonable Obviously, I billions against clean backlog, think a With assumptions to far $X kind when these what some rest But demand, are the I of At is number next we the seen. really into will spend energy the the three only question look over of do be

to you they on and I that example, know So think regulations comes start do to gas in these of projects because for but demand companies, without or want if back, money not to will oil spend some I really decarbonization today. see with are they really financial a condition

demand, hinges it on say. I more So would really

John McNulty

maybe that. guess, Got it. enough. Fair I top And

bounced XQ it certainly the or where and thinking there back you about now maybe kind I way bit percentage and a the obviously lot bottom take-or-pay think thresholds incremental we drop versus watermark well. have a like fall and big solidly. you XQ what that how about line be to pretty maybe in pretty sound should does of guess, actually not? that? think is helped to at was XQ three the a When that in of So as volumes above do business about directly a is Like that it

Matt White

is this John, Matt. Yes.

XX% I when A the defensive that last take-or-pay, you quarter portion, addition rent. contractually. about the may protected had spoken in about is of also recall is large half think to sales of the we and

So package. the the on continues throughout rent

In on-site, at your a that have South we the take-or-pay, to maybe that few America, On a have tend on level. to you few. point,

we cycles. little in levels. that of today consistent past a You markets in traditional have seen lower see certain metals are at running these pretty like are what and more But

and lot working regions we is paid. And reason the and And our markets. say, a would continue cash Europe. few because for performance players those capital those in are I flows, look as a though, of part to South So America, most you obviously, in connected top-tier the in at to get our we

us. in does will prior back And we as that up expect we that seen these have So come insulate cycles.

John McNulty

Got it. Thanks color. much very for the

Operator

Thank have Up we of Morgan Stanley. next, you. Andrews Vincent

open. Your line is

Angel Castillo

Thank is on This Castillo, Vincent. Angel for you.

to Just sounds here. quick It continue positive, in you question quarter the be on third like expect to strong a very pricing.

last obviously fourth into one, what going two, end of about been are it as quarter, how of is kind why the thinking XXXX? of And that? or that we few the you still think So the kind we just It's X% maybe embedded X% And think in end solid years, range higher over is about that about? but should the lower guidance? to the

Steve Angel

expect I beginning sequential are really see geared towards I QX, the think, pricing, price the of way going because Well, the of QX a much year. to wouldn't to in lot our increases more of

think being the And expect I up am now. So every into But round kind may that going in then not year, we It get X%. anticipating forward plus end next there. X% I to it's one. of year, to

Some years got have we more.

back you If and go look never it's historically, but zero.

next year. my expectation be would that So

Angel Castillo

that. terms of Great. And the drove so Thank in about in of then talked strong you. some Americas you margin what the and margin,

the could forward? American color kind of more some expansion margin going level of we give the what is As on we And the is look expect about regions? at stable And you to expect? kind if it rather for to level fair the other year, you margin the of do of the other on could expansion come think most coming in current regions

Steve Angel

to we a dividends Well, in of continue work going forward. I don't lot going is pay good anywhere. expect put to that have backwards And go the to

least levels. margin will So at volumes will coming back. the But margin be what these stable, will lift at levels it be

and we And good as have are the QX well. as to to good as normal, Americas, mean, something the good of job freezing, also fees, there. volumes know, on They had those, certainly year, Resilient have always And on is exceptionally us, take-or-pays, in We pricing fees, we all Americas is. to cost. a that team a done healthcare, that, recover The held from up you food far cost. is job and I expect still in more They for Europe. rental strong leverage programs. below last always again, are of QX. The storage did commercials terms everyone particularly conditions, productivity in margins all just like markets

as drove we at all that's science, improve very level terms of our it's not get profitability. them. businesses, small So that what and here of the can all we philosophy granular and but in really, rocket of of large look how and And we profitability

Angel Castillo

Very helpful. Thank you.

Operator

of have Zekauskas Thank Jeff we you. JPMorgan. And next,

open. is line Your

Jeff Zekauskas

cost sequentially maybe like second, to prices sequential broad-based, improvement, or Has questions. Two and oxygen subsequent do much. we that in is is more up that's in And very in and it or other in focus areas? are it price more the of cutting and it Europe with and your the quarters United in nitrogen is Thanks see the the been will States eccentric hydrogen something that?

Steve Angel

that see contribution obtained and from to wouldn't been way the we probably somewhere price has because order of helium. quarters much sequentially, XX% helium, contribution there the in in were But year-over-year Well, probably XX% to none some of sequential pricing. from increases in help prior

have So across I looked all the answer that liquid, to price broad. have good of package realization good should price board. our price is the more see really Merchant pretty good I realization, I gas increases, They at businesses. say.

as long-lasting one two And So as it's that wouldn't are of it was, driving price the or it it be products all if not if broad-based. increases. we had

could taken cost-cutting, it's in terms and Asia, the it a like cost. little more But even On quickly places of a we longer. been always Americas, work we it's broad-based. certainly in now in doing respond on Europe same have So little we

we there beginning, the have work have known we in needed do. process which through we said to we As the always to

process taking you I But to we in what have many you get of been think in very EMEA. because good cost we in ways the and forces continue to actions will progress why. granular with good it process that is making a And that. detailed terms do and are

is improvement at probably operating there and over the more and could look opportunity that's of in the margin perhaps case. long term say, one So terms that

Jeff Zekauskas

much. very you Thank Okay.

Operator

And you. Fargo. Wells next, Mike we Sison Thank of have

is line open. Your

Mike Sison

of a X% some you type industrial of Nice if What X%, Hi when your X%, growth, earnings global back production ever think guys. growth year in cadence about variables, of sort is pretty the tough impressive. maybe quarter. we to and Steve, XX% growth? a of get

Steve Angel

lift? how mean, in terms that should margin I You about think of

Mike Sison

Well, to I right. growth better the would imagine than be XX%,

So just that lead? curious be I would where could

Steve Angel

around get would more this. continue don't will to give were, that will you line. But my help, there I to it back I that it color there a Well, And our be double have obviously, terms comments continue and what we give we are that as much, is and in some a lot how little about of said way a have we again the maybe if productivity, just be is the later. a next that backlog, lot in fall is pricing, more we leverage And year. to the about earnings EPS could around January, talk volumes growth me execute volumes confidence in be will to stable pricing get to of think will around back have it digit

Mike Sison

a And gases. have up, bit historically any gas more seasonality But up, go when there up it's prices fundamental here? be whatever. little gas positives gone prices you potential Do natural for good industrial with think maybe tends prices or Understood. then it is gas to

Steve Angel

of of lot $X, oxyfuel you where range I reduce if natural think some of activity. to it's the like natural I use that old $X, that valuable. thinking point side. the gas, pass-through combustion prices accelerate days would see $X prices are that it applications all the and don't hydrogen back to were that $X natural got gas into therefore moving would of gas natural on the gas a more our kind

that's think whereas versus So hydrogen if Gray hydrogen a to prices are and our hydrogen about function gas, little competitive. of really grey to of the it operating it. you electrolytic expensive. to of a really green hydrogen. are I natural think hydrogen in prices and it a for more And terms ability does make more function make capital green trying bit example is hydrogen also But really renewable lower cost power lower

Mike Sison

you. Thank it. Got

Operator

have Thank we Bank of you. America. Byrne Steve of And next,

open. is Your line

Steve Byrne

due Thank you. to strong you COVID. oxygen Steve, being Yes. medical the mentioned

nitric one your oxide. medical is Another of gas

for just driven one Mallinckrodt any I that docs a you ago. have product? in treat that with the see competitor gains do you off-label liberty to Are share can't that patients? few that. And use but have growth seeing meaningful You for COVID know weeks Do product, potential to filed bankruptcy you advocate

Steve Angel

this Well, Steve, a know about lot topic. you

is one time, this So clearly, business the at space. is to Mallinckrodt market had which share The enter nicely. practically why growing all we chose

that the somewhat to Mallinckrodt, hang right. We because certainly is we recently marketplace. of are The anticipated COVID, they muted they had receptivity nice to in would has been Clearly, do. to seeing being wants which what what growth competitor, on

you to get So presentations, cylinders. there, need equipment, you to need the set you need in provide make up the you your to to need

to as that ability advocate you nitric that somewhat terms potential, it COVID. the to we lawyers engagements are us. it really is studies the don't been in demand, that's With slowed to use oxide off-label how COVID. And against clear very correct. off-label say We the certainly much though have out are effective make frankly, has for there our for as that example, the those I still COVID, being question respect so, excitement, in because far quite ask the as of use, there the But to there. are business, of is can't used fight

really answer that am taken that's question. that I I some But aware can't of place. So

Steve Byrne

your you enable pipelines whether it your pipeline longer at customer really of fraction projects that And an either backlog of or say, Asia your you would existing What network sale cost? base, one of into is a for subsequent tied on expansion more your refinery or investment term capital of it's to gas. represents an modest

Steve Angel

pipeline we tied a other to but to complexes, able extend percent of that not in huge customer major either that to a are say, that were would a enclaves existing plant a of add the I it, park. customers or percent only to of baseload that able in, and we serve, be is

the add major of at didn't the can I billion. large look but I percent that So it's $X.X projects percent, a up and

Matt White

part base And is those our Yes. with right, this existing that, our that to and having Steve, secure also of that was that, to us ability also aspect win contracts. helped Even asset Steve's Matt. of density point, network existing reliability

Steve Byrne

you. Thank

Operator

we Thank Vertical you. McCarthy next, of have And Research. Kevin

is line open. Your

Cory Murphy

an question This hydrogen it you shots. described rifle is Kevin. had morning. you as earlier said for about To on investment, Hi. that, Good Cory,

see might with Given out green something description? in your week fit put [indiscernible] government you California the geographically, the increasing upgraded where plant Or you shot you hydrogen rifle do support for green that [indiscernible]? like hydrogen, plan this a did what for opportunity where instance, Chile's

Operator

This line. Mr. sorry is the that. a in. want operator. to call on his was of to static I Murphy There lot ask I am about back