LIN - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter 2021 Linde Earnings Call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Juan Pelaez, Head of Investor Relations. begin. may you Sir,

Juan Pelaez

morning the of Good all presentation quarter and and X appendix forward-looking section. I'm earnings questions. Investor website Chief be in joined then Head Page you. Officer; quarter and linde.com this note Chief The our Sanjiv update to on answer at are disclosure and presentation. to the Matt Juan available for read available the XXXX Please applies it statement slides give first of Lamba, this I'm and first an call Officer. Relations, performance, are on statements teleconference. Investors Matt and Sanjiv morning, thank all that now to the White, Sanjiv, thanks Financial Today's everyone, Operating your yours. this attending in Pelaez, by materials during Crystal, the Linde's and we'll our webcast. made will and adjusted business reconciliations of numbers outlook on

Sanjiv Lamba

across Juan, merger. few themselves. Once diversity. XX.X%. anniversary X-year on and very stellar morning, our the XXX for numbers. we making Matt XX% ESG progress financial operating the more speak points Linde expanding in and XX% goals through ago, ROC fronts, gender of A details the reducing frankly, marked will course, operating the everyone. in course, of in the strides carbon intensity growth growth -- walk through months But the they margins again, good across all another cash quarter basis delivered And flows, team of of at Thanks, and strong EPS,

recap going you also on medium-term So expected financial I'd a to ahead. both performance our and to provide like the take outlook performance opportunity

determine and, across Slide return to flows major see, our we Slide performance metrics in X margin, course, these X course, all to on from financial competitors you it across key XXXX capital. is, of very led to move most operating on shows EPS, clear this are cash metrics: quite that XXXX perspective, important of profit importantly, And have the growth as From industry. relative to financial X. my operating me X slide, Let X. that

I'd fact, undisputed performance has entire industry best merger. the in that pride our the some Linde since say In with

Our while X the worst in companies employees is during new. of global have century. accomplished course, this integrating But possibly nothing pandemic a this

last and history about been industry bit the We sales, The year from for rate the move compound now. and X to decades want of XX have X And competitors merger. across flow operating almost growth exceeds of XXXX talk full XXXX little before that the leader on to both the board. years as annual Linde's to I over EPS, a Slide dividend cash

growing course, sustainably profitably have We shareholders compound value the of history Linde's long a while beyond for extends our company. just and And outperformance of our generating industry.

On XXX. there, the EPS period right-hand can against that broader see same you over CAGR had S&P the side the the over we've

and it's industry continue many to So we've for we that decades years, fully come. for been clear leader the trend to expect

most a proven of recent in I've we out, macroeconomic engineering. course, irrespective pandemic. how advantage including rhythm operating there. provides competitive Slide one prior to our swan enough simple recessions straightforward optimizing you extract next before, COVID map we and a X, of and on plan We've, provides base on said summarize that strategy, real midterm Our industrial our it our climate. of and this can how value year fairly in with It and business Most year on this gases events, the the which seen we get It's before. is on some unique course, starts, this road strategy have black of the page. of

to leverage primarily economic here packaged ability provides model business exposure recovery the So end to resilient our due while and our and gases. have merchant to markets, protection, any through the downside also cyclical we

also closely pricing inflation. it the course, here Of correlates helps structure as with

further You've the if continues already quarters, seen economy recover. to some of that anticipate and the last demonstrated upside in few I

will Linde around care compound has opportunities. there Finally, secular about grow expect continue XX% all the in sales. distinction. that capitalizing our by this on industry our and financial rate of key growth electronics. to metrics, growth comprise These of key we maintain are health future highest to and the we across markets are demonstrated drivers Currently, X

familiar is happening today. what in with the electronic all You're space

looking of customers local to production expand supply improving while Our strengthening chain to are demand logistics. and chips meet soaring

part years the builds. new the of to demographics well, couple integral are of of of gases modern a we to for fully portion comprise continue an next largest I combination backlog wins levels the interest Furthermore, today. component are see to as development to critical expect a industrial towards this telehealth. as over market high trend We fab as successfully operating electronics of care grow health customer and continues

average enable our we business, business, on per know, the home health throughout feel to history, something is served care As trends of momentum leverage leading towards a support of our than us we combination we market. opportunities, recent during share as our you network course, future of That to long expect create term. us can pandemic. allowing confident to these distributed to care line earnings strategic dense second critical growth And, The health for a the grow more particularly should defense and demonstrated XX%. new care we've continue elements annual the

we energy, of topic, clean Now I our all you as impact view energy. XX% transition EPS the course, is outlook. from notice, the benefits incremental know. excludes you will transition Clean EPS to said outlook as from this a hot Currently, the to

how haven't ago. I until realized were quite there months really X In global hydrogen fact, many experts only

enable doing However, been producing, storing decades. supplying cleaner fuels something to is hydrogen for and we've

been years. fastest-growing over molecules our hydrogen past fact, has In one the of XX

view you clean this, But positioned on I'd sales the evolving our exceptionally overarching succeed expected provide overall or different you want the given taking countries are strategy going with to guidance we wins with on use this start, landscape why rapidly and last share many to I paths. well either explain a market, This to before So state clean forward. energy few a like energy Linde is to from not time. I at is specific that slides providing

So to the pace the projections. of transition just make detailed too multiyear is uncertain

play safe provide knows will market on the say further that However, a energy experience, the X. slide, to what view to this, transition. how out. really our I the that of on in like Slide asset you the decarbonization market elaborate the It's can significant ultimately Linde has technology to network confirm is the nobody clean To be next I'd and player the

X So pieces. it overview clean potential opportunity. of may We be helpful to start of transition with in think energy an main the

being first and solutions provide managing how to clean The carbon second the can to hydrogen we relating development.

gas of example several that and is Now reduce, $X.X business or billion, at end monetize carbon markets. A we applications good have sequester already number for of key this serving about significant capture, clean streams use. a our current dioxide

the important we green available ahead, energy. to of opportunities cleaner removal through hydrogen we to more capture will can play our total reduce an blue enable and by carbon theory, transition market. current $X In emissions. hydrocarbon see their to Looking for and role opportunity our trillion be Furthermore, believe their the technologies of solutions customers both footprint the represented in and

it take be to will solutions, by served that a blend of will years evolve. and However,

an of as or $XXX one hydrogen example, X.X% time clean So estimate XXXX, reach billion hydrocarbon market. say, will But assumes by roughly tell. today's will

this specific a estimate is you opportunity a uncertainty, upside our business. before, for not to going I'm we as or as want I said today, provide line to the Linde Given reiterate base do something but see that and I to time an significant

production, Linde to network backdrop, to and can the table services, understand of as we of have a of next be hydrogen or an distribution and over slide, years application which find what Slide as on this and experience brings of owner an billions asset regarding may with Whether XX So infrastructure. dollars X. experience the you operator helpful it technology, it's

how or are that We is through chemistry reforming agnostic it's to by whether made, electrolysis. molecule

the operating for energy have of expertise to the Furthermore, ensuring dense and we and cost-effective crucial a in all largest transition. reliable This be the technology the network them. world. safe, have most hydrogen and distribution We the will

a The with clean clean many give integrate competitive energy, various to to key profitably we the well. position finally, the on leveraging approach I'd well across sale view unique strategy to on we've and strategy of mentioned have gas successful to exceptionally believe growing value us or the us this gas solutions also overarching supporting have next as selectively, initiative opportunity. and sale engineering for and into hydrogen. our up our of the advantage. applications history Slide asset proprietary we entire industrial you Overall, left accelerates. And I to slide, capabilities, equipment, something business X, like business, including network. chain energy well discussion integrated proven a technology, very transition the of an leverage technologies before. extended long offer examples some supporting with and It positioned incredibly represents are a starts providing service a leading this we the Our and ability is wrap a as It to

addition vary these We many by we will market-driven strategies. of that, to In initiatives country. execute locally believe

engineering chain across leadership We well as team opportunities. grow to value as insight partnerships our provide expect to our technology continue by the that also space advance us accelerate of leveraging hopefully and and in access, expertise this developing the

that slide, CapEx side the I base right-hand remind backlog. you just you'll of see billion recently these want therefore, not the we projects the are part included to on in announced. our of $X.X and, Now X

and projects in for Germany States. green and infrastructure Korea, are $XXX United over the these hydrogen million Now South blue

Korea. on in pick Just the to South example

largest partnering municipality are build liquid there. infrastructure a We fuel buses of one with conglomerates out to the hydrogen to industrial

the large approach that updates This I'll we see it We continue how continues the number meet of our But small very criteria. as a megaprojects irrespective growing this to and our currently always clean maintain on from to the more in disciplined something size market. of and pursuing evolve. But is our strategy to opportunities evaluate will opportunity, of midterm ones. projects future energy summarizes the to we investment significant provide

our We isn't currently more. of know and statement, early including emission we part of hand point our of part It initiatives. said, our it's Simply embedded ESG to make and are ESG philosophy. mission making carbon world Linde's of part laid we increasing has pleased intensity operating reduction compensation more say diversity, to the I but on culture. rhythm this It's final I'm many I gender values one do in to of enough. to productive. tracking out been is our our XXXX, in initiatives in before ahead and we need integral an forms foundation Now over Matt, our the want

We the this we in to are more future improve which share with until expect performance our continue you in then, I ESG will thoughtfully area. developing in process goals, certain to But therefore you can of a ambitious that call. be

So hand our with to that, I'd who through now take will the you guidance. financial Matt? results and Matt, over

Matt White

quarter overview Sanjiv. an for turn to of X the Please Thanks, Slide first results.

market were increase supports more risen broad-based Before results, but appendix. has EPS a U.S. This recover, Sequentially, flat in we growing and and no merchant supply to from in Industrial and over I a numbers, we the and X% business Gulf on than geographies, Uri Coast sales to deconsolidated the contractual due continue our as while cost offset from in APAC volume contracts in temporary a jump Uri was first reduces adjust except have base. is food, in year operating sequentially. And over X% by details from and expanded with that sequentially. Furthermore, the and over quarter are find line due grew points. year inflation, consecutive year, segment local were of provide grew end you EPS recovery and our a for outages seventh temporary lower mechanisms the impact year trends ownership from a that negative increased the XX% than the production we appendix, the consistent joint XXX sales operating immaterial expanded profit combination can most quarter, pricing, incremental volumes effect year like in market which sales margins on that packaged for Referring Volumes marks which have from have in Operating sequentially. modes. last we to had effect prior end note the every GIST, maintaining X% our shown position. seasonal divestiture, since in structure. which last X% to globally cost of levels which inflation. operating the of increased place in last Storm in quarter. is to points, improvements weighted deconsolidation prior by basis remind prior year majority a Pricing consistently X% a profit you and the into the in closures mostly Total higher for XXX over X% negative effects Underlying sequentially profit further since $X.XX volumes. to more basis distribution and and X% XX% of margins APAC, seasonality U.K. sales our I'd fourth and grew venture about X% in restaurant

$X.X in economic XXXX. as great the leverage base company Overall, deploy. an a significant done for recovery is return generate XX allocation with is right from define side. starts which X is cash less of and base venture validate down disciplined we to a the and focusing can profit how making on capital well CapEx, energy you cash management CapEx the have Available billion spending Approximately cash been projects Sanjiv than You including between deconsolidation. CapEx mentioned as growth, and than well maintaining earnings capital differential by while offset can by in had XX.X%. quarter year of continue majority announced cash Slide cash healthy flow we with protection for XX% capital levels of up focused temporary wider strong levels on of update continue thus management, and growth on-site Linde for flow, flow mostly evidenced as to operating EPS, We exceeded yesterday. to it in prior projects categorized normal as process. our which quarters. to on the XX% downside another provides grow small we project spend clean the ROC see rate joint more slide. job And available wins CapEx. the more as capital half results which operating as our these we process. trending the generation, important, base percent declines It reaching on capital on offering clearly the as employees conversion we increases which the growth last double-digit operating cash, operating is has equally while the is X% have shown positive left backlog driven while in see

Our capital process allocation consistent. is simple and

Slide by the you shareholders. XX. investing $X.X provides provided cash, forms returning operating on quarter and outlook to represents This dividend wrap have We a the but is Sanjiv. stock raise mandate is more I'll cash priority used leftover approach balance, that find then billion billion maintain growth guidance, grow spent our to After foundation an to A importantly, the pie the credit of first which which, how invest And meets rating year. repurchases. any The chart for in to criteria. and can with and $X.X up earnings every strategy our we

range QX. of results any $X.XX the of with foreign In quarter to assumes important over related not estimated second that economy true preliminary an which a our XXXX properly does companies point guidance words, underlying came demonstrates, FX QX better Sequentially, XX% on be increase an improvement seasonality. estimates. XXXX mere provide since XXXX XX% in stable X% than represents The showing. to range growth, the the currency recovery from moderate this other believe is improvement Note April was year-over-year The This range midpoint XXXX. conditions guidance distinguish includes which to tailwind $X.XX. over normal low to comparison from in internal guidance QX it's and weakness. between the assume may other I this economic of

we higher at and to like which conditions if than year as So The $X. $X.XX above be QX better. At outlook updated the the is performance end we or approached I'd half full quarter. XX% year have of these of QX better last what provided persist, XXXX. range $X.XX or year would above year above the range we full updated for QX XX% The XX $X.XX this upper range. full to midpoint guidance was XXXX this EPS approximately combined first half and in this relates to comparisons. how it the year the especially guidance explain is point, latest

have recovery have more we sense we next not we we we get economy we of Rest a guidance. detailed improvement However, the capture as in quarter. the will will half updated until better words, the second recently second provide half assured, the In pace. alone demonstrated. other a update Furthermore, any left

are the visibility. until half we back adjusting today, However, get refraining we from more

economic year the believe most call Of to prudent above be will course, range. this given full the or I'd But conditions over approach global like hold if we this we uncertainty. the now, Q&A. for is for improve, now turn

Operator

first Instructions] Koort question [Operator comes And from Goldman Sachs. from our Bob

Bob Koort

I it hydrogen and in on curious, green put Xx future lot price implied I the green some do some going still hydrogen? all think markets of to just incentivize a an obviously, you of uncertainties gray how do comments, that's And develops. X the adoption tax maybe the appreciate the Sanjiv, was I'm developing? the How hydrogen of price you is see other of you ways to curious, that or sort need to carbon forth hydrogen. world

Sanjiv Lamba

speak, a are lot That's we fact Bob. question. very great people discussing Bob. a I'm that sure of Thanks, as

to right. essentially, blue in the happens, need really and green between inflection point a a you're providing green for happen. option. immediate that scalable hydrogen X Obviously, somewhere where we get to blue to Today, things more But hydrogen, middle, differential to kind So see hydrogen gray adoption absolutely do of it of hydrogen.

a other or get might range put what pricing that carbon and go about incentive you view the in it look tax, what We carbon are across can that world what mechanisms like. something to But regulators first, if a need on The that necessity. create to that's about do to talk place. like,

you've and significant you're seeing the as One green hydrogen, you're is are that comes know to on obviously Bob. I we're get And work well reduction of aware, for second our cheaper. of work costs option, got where lot becoming planned evolve The sure that about technology to happening CapEx energy costs. is down equally, renewable space. see a doing point lot making a is, There a in which second in X the down. there's

option ITM but making sure there working through So sufficiently us give the that as on well. the PEM improve membranes example, an little as of around also lift efficiencies bit to that, a

X need adoption Bob, all on. those really to point to the things referenced I inflection So earlier of for happen, that happen,

Operator

from P.J. Citi. comes question next Our Juvekar from

P.J. Juvekar

Yes.

of tragic to shout your all, and I helped you India a employees to want this oxygen situation. in getting First in give out hospitals who during to tremendously thank

question for does then from And last So, And are up manufacturing, well thank inflation, you and you if quarters. pricing your those accelerated your price seeing commodities, commodity of in compared to have chemicals metals in few customers all customers? -- there. with is, get seems is general as then and go kinds XQ help it demand it my to prices in as strong to Americas

can So dynamic? just about pricing you talk this

Sanjiv Lamba

P.J. Thanks,

whole almost teams do, X,XXX of support to produce than weeks in to is The over maybe that focused out. India, kind before reworked proud talk aware So couple Everything clock who we a saving there. the I team shout of our they briefly just of of about challenging more I were are lives. family question just to and X your to of minutes, currently medical just the I'm are tonnes working kind situation here with hospitals, take That's want how round kind India operating philosophy day oxygen. what of And appreciate on I we get tenfold also how in of producing per ago. acutely to delivering their it's that. on P.J., patients,

I been about that. So the hospitals deployed a just has take drivers to done I thought about country. being phenomenal There's on that. work there. huge amount We've it's in appropriate road, moment serving the of a work gone in kind that on X,XXX cover of X,XXX

ahead. the Of We've have to ideas. containers. course, to being go in a global as has chains country on They the lifted well. corporation, many ISO air able Governments our help Linde obviously in supply helping are now the and taken XX XX-plus of been another globally days

armed oxygen going seen move around cases, place the Also, we've various forces, many put You've the Express locations that's that's that helped India. Oxygen in in something and country. the across in using to

is we our of in as want So to a deep, is appropriate. were countries. enormously just we're press. other teams appreciation Obviously, deeply situation, Lat same and a they to done the with work and hospitals have word doing similar Am but challenging get quickly Brazil, can the of I add good Mexico, all in for also country they quick challenges support didn't patients. faced maybe kind But reality

I'm So, the bit doing world are this across our our that communities through proud to their really support pandemic. teams

natural specifically I'm talk view track know, inflation record on that we of have of we of will think more going our -- you conclusion consistently. weighted as going you kind to a on inflation kind P.J., to prices to average to up know, do as And our price inflation, as question are great we as on being happens. is about that see And typically. a there inflation. we And your able inflation, Now

even us pricing. when there, seen on fact, In perform inflation our wasn't quite you've

if carries years DNA back go And that you the to of positive is on the pricing move on forward piece. history that's well. Our as team kind pricing XX the

does to see happening that as So fully into inflation come play. expect

Matt White

said. And add X to what P.J., is I this Matt. just one or things may Sanjiv

I'd you in these even tends know, to second only consumption gases is and Their to a volumes see as then them commodities, go is thing and And good -- in also add we increase seen contractual. reminder, XXXX pass or That's we've are example, a any all before our a you inputs commodity tend lot. good say have, through. well up. cost what XXXX, I'd of as do example we rebound patterns customers' when think some XXXX, I a the 'XX

mean So with we'll as see just overall a be we're see of also tends that that activity. to parts I industrial starting see to what positive well. it. tailwind extent But you can to

Operator

question from from comes Our Tony next Redburn. Jones

Tony Jones

I question. wanted parts the to X are to ask there and margins, about

for reported first, ask, effect, surprise. And to to important, which good down points there you XXX you the as I call Or time? adjust need improve know OpEx it a any it, continue level? sequential wanted with are product over to deconsolidation of for now improvements it's I now as margins, so $X We've maybe potential there's got you this So margins with basis out further is part this just the but then further or sustainable improvement. get you temporary gains we to second around billion? and is do think more as gets?

Matt White

this Tony, has is Sanjiv handle any that Matt. input. probably other see if I could and

the had the yes, the margins absolutely, There's see I we it you if effect can same. are pretty temporary. the And deconsolidation at where to as sustainable. of kind the confirm, on nothing up, look see show the you margins the Even going no we in APAC effect, just So appendix think much margins. on

So referring again, profit. operating the operating deconsolidation effect. to as no margins, well had And here, I'm obviously,

as, putting the quality as together different we sure between X something nothing the Americas, run is segments And and every everyone look geographic across sustainable. the supply making fundamentally business. it business efficiently market thing. and would -- X the drastically is see the do They So a about those you modes. quarter. supply is different. right? I've that far and effectively. and world question just said They it end same we APAC, as aren't is there's EMEA have hard good When homogeneous that asked in distributions absolutely this at But work before, all of it I is doing. say segments, get We that at very this, that segments. is This as It look gets, it as we This that

to So you that what opportunity XX%. the kind XX%, is. of XXXX, set back was if And defines was EMEA Americas go

Now America is EMEA is XX%. and over XX%

was almost the improvement This So kind aspect. as to you're way. what we're whichever segment doing of is well, business, showing the don't would APAC any and say this temporary seeing is XX%, XX%. see board, part leading And run across of I the I is

Sanjiv Lamba

is add that that competitive EMEA guys heading The actually only both thing APAC margin, out and Americas They're for right? are I'd pretty there.

Operator

next comes question Tang Our Nicola BNP Paribas. from Exane from

Nicola Tang

you First, I just hear of bit EPS just from or about know, don't half assumption assumption, a in the the But gains of we it thinking FX know growth thinking how productivity wanted sort ask talked only about I of versus, aggressive bit which of X% I lack second sort I sort at I even guided, before tailwinds think volumes. support and you about first little the the volume that of about on an to outlook. volume the you XX-plus half, you've completely guess, I suppose. I if implies the look just the HX was a buyback, about it even seems

was and there a Is was part you in I and in sort the is the I again, the you're in on other distribution projects on it chain the fueling a you dynamics second just is seeing of opportunities there across terms anything lot hear of dated. of So value the on sort proposals are evaluating, when moment? HX being broad-based at the that of the specific it of kind HX of of uncertain timing terms basis? But hydrogen that if which in energy. I of at and those pipeline HX look the sort of question you production versus then activity? end, And on long Actually, hydrogen. wondering in detail the or being most for some missing clean Thanks was a year-on-year the project

Matt White

Okay. can Matt. one, take second. and take Nicola, I the it's first the Sanjiv will

I a really touch we -- of pre remarks, companies even just lot it. Obviously, guidance as didn't the in not today. So mentioned there's we giving

they in mentioned, confidence and wouldn't as better of what bit adjust well, we're take the what degree to now, X update do therefore, that alone, than for would second of view half. we little conditions we've if deliver could we that if look second out other can yes, back the I our this. on just right far on that high we do this a months better. into it very from on But than and demonstrated now, felt a And too point. really half have We we I we for half as now, going as we're felt And year much will we quarter-by-quarter, just assured, rest the then, But leave at kind that. QX. hold, approach. we'll But a it also Obviously, wait-and-see improve, of laying

Sanjiv Lamba

And moving HX Nicola, now the part of to asked. question Matt. that the you exciting on Thanks,

So take let you buildup back me asking the see looking a kind were deeper and and that some bit at where about. sense you little just you projects then a of we're step of give that a dive of and tell we

between So we're XXX moment to at evaluating XXX the individually. opportunities

well. don't there'll we'll of that will smaller mentioned, selective we to I And and ones of obviously, large as investment that down do probably see, be meet as many maybe well. not Some, some megaprojects they so our about progressing, because kind some want very as not. And them to we the criteria, be others

spread primarily. focused areas Now specific that we X in see

think and well capture understand if and ahead, in gas a I development. you which like, in kind want to And particularly your lot around manage energy up, picking production assets therefore, distribution it I on and, see exact what think transition we sequestration bit To in a best balance is have piece. the mobility, oil how value a of to geographies carbon chain between the be we dispensation. tends its then mobility of point of to see, little part driving through and which versus this

technologies have chain. value the We across entire

hope holistic I consequence that customers. are that the in lot hydrogen tends is ability what to of for, more be which gives So you on to the as asking many a potential have it into color were CCS, to provide comes able enough side, to production to of the to solution kind be you CCS, in On play. Nicola. particular, fortunate where we a ways, piece, really blue our obviously,

Nicola Tang

you. Yes. Thank great. Absolutely. That's

Operator

Our question David Deutsche Begleiter Bank. comes from from next

David Begleiter

same is and/or on And you X forward, much on over project this years? the clean that to think just hydrogen will going -- On looking energy you're increase year? do perhaps CapEx X next how how your focused the or point, at trend

Matt White

Matt. is this David,

the we So very I any. prepared most CapEx. the the think base to now, right little And mentioned remarks, energy are as of there's in clean in

Sanjiv's seeing assets a areas. point, are So assets those CapEx. This mobility. building either all more in we're in we the X areas projects distribution is lot base you're to density or of certain And highlighted around that

we'll into vast the do they we're what is that growth when now point, of obviously, But of that majority backlog, something the doing base right CapEx. this come So part that at that. note in is the

David Begleiter

-- that we're just And seeing overall, good. much the few merchant you will pricing given be forward? Very over quarters merchant increasing And how this the next year? pricing, going on should that are inflation realizing

Sanjiv Lamba

David, But across different lead, on seeing seen show that little markets and improvement are we bit and behind. merchant tend the quarter kind EMEA I'm pricing know their a APAC typically. in next looking pricing, the this talk numbers, to they -- them to of digits mid-single as well. is low in from hearing some call about to you've they Americas that So to we're as and sequentially

of board seeing across pricing kind move So we're kind up. of the

well, earlier within conversation mentioned of think already this we are be been and that. move. there inflation, your will terms prepared the enough And is organization I -- go we've in our our Now pricing we With seen point how how managing That's there are well up. inflation, will on David. traditionally pricing I as

I'd So to see expect move continue with inflation, line. to pricing in

Operator

next Our from Fischer comes from question Barclays. Duffy

Duffy Fischer

on The I to in ramping that there and they're in we wanted X% beginning XX%. APAC, to commodity volumes if that up you're X of owns could. kind down I understand X% kind particular, pricing a market last So maybe where that asking bit price one, though of they're of particular, production dumping ability been flat as how a follow think at is given their business. something APAC now not volume there, pricing And even the volumes kind oxygen just for But the I the there? somebody more price in it's the their about up or up on little has when easier. offsetting something generally, of get for your at increase, own who getting gets period, units quarters, should steel like we're strong that? seeing were Is

Sanjiv Lamba

you as APAC to question. be will because this the for my glad listening Duffy, thanks asked it team well. I'm

And kind a that APAC is in And nothing moment, They X% teams moment, as pricing hit QX, least geographies the cases, should on-site the out is some at is have X% I hoping the in that QX handed putting I'm pricing X% should is larger But terms in that And target year-on-year a a there. is of happening. and we So disappointing. expectation The view that. we've of there. the The aside for know well. change some targets see a my bit at have. distributor our over structurally market of see our the that in corporation. there X% to of over we'll model in to in that fundamentally improvement is, the as progress level different sequentially, little different see we

there So is nothing from -- that. them nothing back holding

Operator

next from Jeff Morgan. Zekauskas question from Our comes JP

Jeff Zekauskas

begun you with you there in project went is, pressure, being benefit of that for description That inflationary have quarter up price X% the your but X%? That that? spend was have is, And cost X% on update an secondly, mean Matt's do Exxon up went prices going the costs X? to to Singapore? listening that prices in does up and In

Matt White

first can Sanjiv the take second one. I Jeff, and will the take here one,

know, well lowest every spread important we as that levels inflation at, the important, a spread metric look different country something part the the has that constantly as you is look the is less at very manage So profiles, that that spread how spread because we price right? detail but very compound our we of is rhythm operating every country productivity at. Every at decades is of country different, And of go. inflation of cost our is

as our We're quarter the lower, top the first So were the to cost obviously, efficiencies we cost. house on here, have achieving the the the some given front, you we in at variable also achieve. fixed they of especially to efficiencies price were in saw, cost probably X%. On at able just due

always make much ability in probably industries. And don't large through, basis, to that we spread, pass wider they in little also nevertheless, other was in of sure as spread the to have commodity might feel see that a you manage we the on But So the create it. first quarter. we go-forward confident do we this quite a and issues them things, on as inputs since our types

us, and do it's fixed lot of the of part rhythm. really which what we costs managing So for operating costs with and a the this SG&A, the is

Sanjiv Lamba

me And a Jeff, mentioned. let that you project the talk little move on about and bit Singapore

But the project. COVID the itself. we been impacted We've as executing as project project. have is schedule far our spending by on on we obviously have been the So been concerned,

in commitments and have the place, underway. currently project We is

fact, and area. reached the very modules, have in in modules, site first the are now large staging Our

progress as So we happening speak.

Operator

America. from of comes from question Byrne Bank next Our Steve

Steve Byrne

terms on Yes. see would you're expertise advantage about area X restated, be many from in Slide that electricity you welcome with that There's that for that couple entrants capabilities the power clean you suppliers, seem about a is energy pricing out mentioned advantage were are to getting would that? and it your Sanjiv, of versus contracts talking and you supply you that that that meaningful that at one into pretty having don't you, Linde's of renewable power new comment renewable on Can projects I an whole have would and I to business. looking but comment a on have access power chain. maybe or lay the that, hundred the suggest this you a clear in there case

Sanjiv Lamba

a mentioned on we That's actually, And make. Thanks, Steve. should that great slide. that point probably you have

suggested. absolutely and So -- way the right. renewable we power, you're are about well There think

tell that power consumers to the are the in you grow. with renewable now these having conversations back, renewable just on one suppliers, many where is if have, actually by with to within you a we ability tends And go most like, a largest power, grid take and suppliers. we're of we We and power step itself and of is that what to as those I grid them, of if to the happen collective consequence continuing level of countries are operate. can have therefore, moving And the conversations itself the our

good that's from these are larger So seeing that action we players.

it's our cases, of other we and have contracts as well. that their how then we in some specific whether with as on In a of addition methodology sign And whether or renewable support grid renewable on well-established incumbency, power a it's one for go obviously, power, with, developers out PPAs cases we broader to in cases on specifically each PPAs then shared basis, often would on pricing project to as because these get them that, the well. kind of of long-term circumstances a who, in up one-on-one get basis, into in we providing

incumbency we quite that And our something that and you're provides on a move as bit ahead. So advantage, right. a is it's we obviously, competitive that, focus

Matt White

as Yes. And Matt. it's a well. Steve, just can I add things few

know, of you as may renewable is today, X/X about our power So already.

power built So years we or emissions that the and of been that initiatives, in we to ESG we've ESG And part X will many has the a fulsome, in give And especially it's This effort. not quite as update our integral already future. is this point. say, wholesome to ESG taken is managing active get we space, something overnight. mentioned, renewable an around more I should Scope

this something So are is that absolutely actively we doing.

to and period give working help on further doing that given and ESG. time, investments, your today. been a we're relates And for position, these of we our something initiatives to we'll quite and able our for looking for actively have long are it's on point, as it updates We to

Steve Byrne

that do Linde, of and you're go? can you end think to of the With you on you you you long Or you you've the are out? the coming that you way to Praxair merger with a synergies initially And that think either got the comment do laid cost where in of reached process? think achievement

Matt White

Steve, there's productive. to and end efficient never an being

we we same token, do ourselves end. always our for -- is do it demonstrated, performance. judge as to a we to you you on do as It's last back good that's we we performance. that you How we've do How the on as margins? in years. our we number, grow culture. And a -- continue integrated we've cash? start and basis, grow? pretty good in have EPS? expand manage X we How know. years, the on something did presentation, measure it's this started know, think I the return we We've do Looking How we capital? So generate is relative excess a we there deliver? How job. to got But gave How us our couple said, a we no do But on done of

for to foundation to forward. what this be going is so do continue And going going to the we're

Operator

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

John McNulty

a a XXXX to maybe larger whether I out bit of a those? recession is leading sign the to I the was And on it. maybe was some about the follow-up different Can say as on-site projects demand bit this to get guess, the quicker? is little that out little and there was that, how the for units we around bit the COVID should color other customers for snapback contracts a you then, from a business you thinking more that and little day you a speak a if of the more be to maybe lot smaller scale indicator of would small put dig oxygen for that had or wanted this into for release it

Sanjiv Lamba

that for of question. really John, proud that I are admit we must portfolio. on-site small thanks our

opportunity across world. the kind our of we And believe for fulsome something businesses a that provides really growth

of how couple a portfolio are correlates there So seeing we're to ways see in and market. at of what kind that that the look to

fair typically units, linkage into and COVID. that that in that amount lower slightly pulp not do purity, units to are these We Most industrial a coming of at we're no There of seen for all. paper. VPSA growth from growth which pulp going and seeing paper. So is are We've processes.

We well segments other are fact. glass metals seeing in segments and growth and many around in as ancillary -- some others

different that it's is see So large These supports good portfolio mean I to it if see of as projects, generally. activity would people industrial widespread pointer a that question. don't industrial of move, a to correlation particular say number And industries. we you do to for that come a I was But I a your larger play. increases. kind their this consumption activity. correlate into

Matt White

add one to to going quick just was I point that.

as we together, both area know, we filled committed to where think to was line out to. plants. where That from given we earlier I an technologies when small success I think mean, it is brought the I area the a an this capabilities the gave synergies. the Steve's of and this it's of combination very that. of portfolio execution the probably think the on-site And rate we've the a strong really never was had I of question. company. merger And you revenue product speaks little a kind companies not something bit area number But

John McNulty

little to there backlogs XX up like the in I that we've be Got be again. again, start it that long it. again? guess, maybe, conversations should kind having, we project that guess follow-up sense. terms And kind short-lived is filling to such the a the going back No, of look you I a it the of it flywheel the know if for takes it I makes that? projects, when thinking industrial of how the given economy, to XX in is guess, as you're takes that -- recessions, I working of snapback normally that, projects -- get does larger-scale in around How to big a seen more on lot a to about about thing months

Sanjiv Lamba

because level of many of indicator. in on briefly the ways, that, is kind just seeing leading are John, we So that activity commenting

seeing increasing Asia. increasing across we're that activity seeing in increasing. seeing proposal We're So the it U.S. We're

as markets Korea, I a of China, ASEAN well. South think about India, the couple

So we're seeing a lot more projects.

these electronics. part a projects of Now, are

about happen on a talk are and we've announcements, fab They growth happen They more buildups the project a all what is progressing on sure, seen are You've seen TSMC, well. forth. new will and you've see lot my quarter. me track, these and as Intel I'm expectation number so before, from of a well. Samsung, we we heard that growth And as see strong electronic electronics in of so

-- the we activity have be track those refining, the is and positive traditional I piece little over all chemicals, I'm I'm that markets, other more picking looking steel, say So activity. are on to also a little more that part see. a there more on as also of up actually to project

this as that not I'm are fundamental I getting on activity up chance a into projects comment this picking So a we are if snapback. going as people see translating and to to particularly potentially are pursuing, seeing in. underlying them we and participate

Operator

from Societe our Generale. And Peter next from question comes Clark

Peter Clark

I've questions. got X

the mean, what First Matt, from continue notice, would QX year. I now the strongest not you embedded, volumes on to one pace cash given about the just story flow, About make for the I But wondering costs. -- second the Is grow the more the how productivity productivity the Sanjiv, more the earlier savage half? companies, the than in quarter. in And being in obviously, they the obviously, is the in is usually now for adding the obviously, I'm if money back normally the severance in in as numbers did cost think. in which PLC. see and did QX, we Because costs the then we'll quarter terms fourth slow, on headcount the year, always legacy progresses later cutting I QX that get performance QX through of that normally such? rather

Sanjiv Lamba

going you productivity. give I'm a quick to thanks. view on Peter,

heard So which Matt be good think observation our on, is always you've to a that kind base. going are me of managing I before, on and earlier focused very made cost say this very, we very

the total out. of carry that we kind reviews something at cash business discuss we Our every is fixed cost month

we of actively. kind something back So cost is manage adding

using which put me speak one entire the helping And you've There's we not create hopefully, in to every deal tool go discoveries necessarily doesn't that, it fact heard into it projects, passionately which benefits but and for day. of look you've out makes it action individual in the It's productivity see me and significant has which our mandate for the part together. as got we going something thing want that's that again, heard every I with but think productivity, kind other incremental to now productivity translate as that organization we this into enabling Peter, well, well the to about Earth-shattering around flow is every that talk new points business apply think DNA tough. to because us that productivity as is add before. I or our it's We're day. that But of digitalization. thousands accelerate of a and that's small about in actually digitalization, us, organization, for a pain

embedded is model organizational organization. Our the within

digital So expertise And to of place. track of put are that productivity across within quarter work digital percentage business them is we and in being kind is from the them. built coming every every encouraging in I we what up fact, initiatives world, or it ask

ensuring that our in So Matt? that enabler is an on I stays see actually productivity track.

Matt White

Yes.

And so yes, QX cash, pretty on solid the Peter, cash.

of cash lower. starting seasonally is with of QX we were our this quarter. -- a your percentage as I when I kind EBITDA, high almost to XXs operating think flow think point, about Normally,

with a of came XX%, it's I of just think few growing first combination I things. benefit at from earnings. mean So EPS the obviously, a all, half of

we through cash should strong as growth, flow So earnings right continue to that have flow. the

as year-over-year terms very just payables, managing well. incredibly we improvement to the nets world Engineering asset we're under just And and continue collections, as working circumstances. strong as management The -- else. had of they other manage performance half difficult in performance seeing their of capital projects around was the of well inventory, mostly everywhere a capital quite base strong well liability the different working had

half, earnings working second capital the a be it efforts. management look with think continuation forward just driven should tight an of you into I As

kind effort cash I each So the to continue and integral see If we is we're through we think, to benefits our continue mean see benefits, results, something we the should of track seeing should can that of diligently month, that very to looking strong that cash. the It's part compensation. that and of I forward. an of flow effort,

Operator

Geoff from comes from Haire UBS. question next Our

Geoff Haire

Just X quick questions.

at the all, of assumptions think I you help First the within Matt, for had very pricing the if you that half North guidance could wondering of strong your obviously, was that us in your if, is. what what to least and Europe I second of also, was then was relative just one year? wondering pricing just And are of sort peers. about and America how driving sustainable

Matt White

Yes, Geoff.

view. didn't continue stated probably ago it about had inflation. before, we So points. last one, guess, pricing. guidance, based quarter, price X% as half on I you we touch, the since X-month second we to And kind weighted of as a expect be would to to But really X fully Number know, a

pricing. X% quarter, This

as a would kind first decimal, improvement But inflation but see don't expectation bit you the are what we of Now seeing of picks be. the up. that's

we what to our forward. inflation look when price to continue are the views Just weighted is

Operator

question from Vincent comes from next Andrews Morgan Stanley. Our

Vincent Andrews

better that up compounding core the overall, from that guess think I sort what very anticipate particular, excess the capital that how in medium implications XX% would to of long putting set follow allocation? And discussion. I about and you of hydrogen the on of we're of and of think our that confident you sort it heard that as broader to point and, our in CapEx much understand, the in we have term, business. want up sort to do sort wanted would very to opportunity clear Just would the in on models just of the scale be I green view

Matt White

Vince, it's Matt.

So I of think couple a things.

electrolyzers to mentioned, these base vast falling in growth majority we be smaller to it production some infrastructure-type we anticipate as would hydrogen-producing assets. or are -- whether under around either other CapEx assets hydrogen base distribution, see and to projects CapEx. right First, assets, And of now, continue primarily of support the kinds

would approach of projects, that to there So these XX% accelerate the that be of base any initiatives. would related say it's from likely or portion CapEx the these would But might announced in are additions they backlog from backlog. I the changing perspective, spend criteria, more same. model is benefit, I and If investment CapEx being How we're not terms to a the we same. our growth

greater said, and XX% it's EPS here. over just can we're we that than would like looking accretive And the And model add to to incremental do. just growth the that rate years so into Sanjiv this coming I it, what should to find be

Vincent Andrews

CapEx like So need into that? we forecast $X billion a don't high to or take anything the

Matt White

we've No, any the we've we that growth and we meet keep I that's they as projects. investment discipline yes. metrics, right the approach, of got over that But would perspective, results. should keep spend, I we'd happen meet only we'll criteria, shown, our think, and large we're our we investment see. our we something And XXX with But evaluating. when projects think that a criteria, and from get should mentioned we'll want spend our And our to function CapEx. If that that right that

Operator

our last Kevin we'll Vertical Partners. question And from McCarthy from Research take

Kevin McCarthy

simply I made that variance, that end-use secondly, exceeded April Matt, if or on a could you What market? was mentioned in sales. out on able but recover sales from of would Uri you comment or you that And a through drag if accounted your just thought drag? may, I then or expectations. your electricity a in was terms you and/or would gas was if wondering anything being comment slight I prepared I'm insulate have have packaged impact results your did the you're contracts, region the remarks, you otherwise. internal if offset be maybe if to of for I there how wondering business. merchant what stood March you end And in impactful? by profit appreciate

Matt White

Kevin, first I the do and can the second one Sanjiv it's will Matt. take one.

for markets was So industrial it I broad-based. the recovery front. we've related to in what is say, an my been most seeing part, fairly developed on would April, comment

in probably say challenges. are the expectation quarter, by some still, But developing the areas, is industrial some end But rebounding. to the I some going it's, we continuation Some through activity, developed pretty see back markets of would hope incremental part, places much seeing. industrial it, especially in that really North a certain markets what's most been Asia. especially the for what we've like you're driving seeing in America, of It's activity

Sanjiv Lamba

And Kevin, kind and moving briefly you giving sense. on to just of Uri then a

not think were quickly. outstanding to even that Texas customers our and in again, them that for their just They've team ensure able me down well. they cases, who And an we helping some players are to managed to started as a that the support just make our of I So opportunity safe did and in customers. it's good start-ups sure our shut with to some safely, We remain up mention job.

have cases well, pre-COVID chemical customers chemicals, in as up back them side. our the started of refineries, on to And whether levels operational So really particularly volumes and actually are back all online. now, it's some seeing we're

X one space volumes customers we the us, again, some we pleased And are the startups. Even were there, to turnaround were winter and they have in there longer quick are already running back from post and in a support probably that customers, think up up you bulk with We know back XX%. about and running. to X today, well. as January Refinery that see our again, quite freeze over most levels I saw a that lead or hydrogen time where to they weeks. is specific see Our

where I think year. higher than they're we were about in earlier the

ready is to been hurricanes, managed. the seeing I here terms This storms, me, has to used it's as good we're how pretty that of been is overall point piece to sure that guess product which freezes. a available not and that go. new. we that fully team every making work is important, significantly back This on year, something and and safe got them customers to we've understands online holds think in again, the So said in getting Texas the our plants well, guys keep is have that I

we remarked. Now contractually, as you've obviously, just protected, well are

that see fairly well. come don't that's line So some we've a back significant But to from we reasons again, April, while top movement. March uplift as exposure, see we seen the one quickly of

Operator

question-and-answer does today's call over Juan now And like closing I'd conclude remarks. any that our to Pelaez for back for conference. session turn to the

Juan Pelaez

on participating Crystal, very And you you. the for everyone much thank today. line, thank

If to Take day. care. out. you feel have of reach a free Have please great rest further any questions, your

Operator

you may great Thank participation, call. for your conference today's Everyone, you now concludes have and a day. disconnect. This

Linde (LIN) 6 May 212021 Q1 Earnings call transcript