LIN - Earnings call 3 2023

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Operator

Ladies and gentlemen, good day, and thank you for standing by. Welcome to Linde's Third Quarter 2023 Earnings Teleconference and Webcast.

[Operator Instructions]

Please be advised that today's conference is being recorded.

[Operator Instructions]

to conference like to now would hand over the Mr. I Head of Pelaez, Investor Juan Relations. sir. ahead, go Please

Juan Pelaez

Thanks, for XXXX and thank Call Abby, thanks Webcast. you everyone, correctly. Good and for and morning, attending our Third Earnings pronouncing Quarter my name

statement in during Relations, read are I that this on I'm with and website numbers available it disclosure Executive financial performance and applies on on Q&A. morning of this to some to Financial the up Chief teleconference. After the Matt linde.com outlook. Chief joined Matt in Lamba, our and and and reconciliations all this White, of am the Sanjiv Officer. Today's adjusted X Head Please update we statements will the the Juan remarks, third Officer; note will will an wrap Pelaez, forward-looking provide Investors Investor section. by presentation made opening Linde's Page of at materials quarter appendix which, presentation. Sanjiv The are then give slides

Let me to Sanjiv. turn over the now call

Sanjiv Lamba

why increasing consistent continue And global and industry-leading productivity opportunities see returns. was is margins Thanks, owners going good points, we closed despite share billion network at morning, while quarter economic delivered This capital and delivered solid Earnings has growth another shareholder headwinds. surprise. Time these won't cash through economic reason Linde I delivered consistently a operating a basis while XX.X%, the XX%, results not very forward. and new operating for and density. flow XX.X%, responsibly results, return relentless no recessions and It's deploy on grew a at shocks, high-quality not culture, expanded everyone. Linde that capital to XXX employees what Juan, and our $X.X finishing per through again, expect. continuing and

striving rather perfect seasons. are fact, what model happen, to time for the predict trying waste constantly will to than In all we

shareholder volatile stewards our Quality growth, strong capital, will running on be earnings and is sustainably future to And an we leading we at our can capital place. of performance. organization expectations. world of focused on Linde, acknowledge owner the hallmarks which history and as are return a Here are on integral generation cash deliver

important investors times think today. of tenets inflation, The appetite, and at economic during I interest geopolitical curtailing activity. remind these especially of to Linde, tension risk key like rising it's rates overall and hence, uncertain is combination

the X. When news remain it's diverse I on which Linde's ability the weather of economy. downturn the However, be portfolio long-term to is bullish in you statistics, strength read any government I our global Slide on on confident demonstrated economic and to contracts, know of based further hard

base when with saw mid-single-digit end are pricing maintain resilient looking and Linde words, others contribution we other solid In X% markets, macro in underlying which but sales, picture, underlying flat growth X/X with about consumer-related model Electronics. see to regardless the percent sales represent creation, low volumes end more the Food increasing, project offset single-digit us of to percent, Healthcare, Overall, were and adapt from at steady compounding quickly down market, by which decrease environment. The of in and allows a was up some or trends while backlog. down. mix slightly than a However, by value operating

Asia. Now, seeing we'll from Based primarily reductions XXXX half both of United Chemicals & electronic up by Energy believe X/X make recovery Manufacturing and levels to stabilizing. Industrial-related primarily due gas growing the remaining States. the first here. mixed begin sales, led customer trends similar packaged with inventory rare on-site the and remained up, of sectors, the we're AI to are other gases, I volumes of and markets merchant signs feedback, in stable, demand in seeing and on in sales

gas Overall, to packaged which Coast Said fourth stable long-term U.S. and as offset hydrogen carried from as This through volumes volumes. model have backlog watermark, higher pipeline and fixed the weaker conditions. operating volumes storm. project quarter we well in into We payment recovery adjustment stabilize a weaker from more economic any down than Metal's contracts continue Gulf met well. Conversely, high is because customer contractual base and inflation growth at as prices see fab are market volumes business have slightly results our differently, clauses. the right the rhythm weather including to end

remained mild volumes even expected at recovery, Looking and markets may high quarter, the navigate and to a with remain while & Manufacturing, U.S. the grow show sequentially. to every continues fourth Electronic into volumes at continue to expected market China Chemicals flat. Energy Steel are economy to ahead much end stable year-on-year levels, flattish pretty remain end

environment continues billion, Regarding activity billion third have the the around levels, robust, are point, and $X.X not by an inflection projects. Europe, which that sale seen volumes to quarter our increased the expectation and some rates, interest $X.X we macro to higher is backlog yet million will of hold proposal has normal seasonal Despite so gas impact. be softer $XXX ex of

projects our our progress well as energy addition, assets. their continue customers to decarbonizing to In remain clean committed

on development, focused maintaining which priorities culture intact. sustainability on our in Be remains commitments. safety, talent a Finally, remain best-in-class delivering compliance, our while and high-performance

you call its that the on financial economy results. deliver seems global continue Matt now through the will to Linde you I over walk only commitments. I to to turn will although tell So can tepid, the

Matthew White

of a of last provides summary X $X.X and Slide year decreased Sanjiv. Sales third billion X% sequentially. from X% results. quarter Thanks,

energy contractual last pass-through, no effect decreased but X% which had are these from the billing trends. on customers, numbers profit. Although not year, underlying indicative to of of cost variances Cost represents

higher to of year sales increased prior units due these X% impacts over to business divestitures, recover prior year and levels sequentially, net and quarter. Price project When decreased timing with sequentially and business last X% In X% the from second contractually over FX addition, X% year the X% the increased from underlying along Engineering excluding X% over of billings. inflation. items, and as continue

industrial markets. Overall, globally-weighted sequentially material year-over-year, X% also regularly not In volume & year-to-date monitor of We countries operation primarily validating requiring recover of their the economy. Operating Volumes with less expanded returns $X.X refills prior the XX.X% existing driven in In productivity, volumes their our growth. by in validate third profit to in production proportionately and each decreased leverage and fixed cylinder have differences. any Metals over CPI XX% further fact, X% quarter, is XXX and Operating activity Mining increased driven X% volume Electronics were economy. as to sales underlying globally-weighted and actions, this gas identified correlation. closely for payment tank and cost decreased tracked have industrial I other points local local trends with price correlation fully year by increased X% billion end basis to expect enabled and decline contractual with customers this greater contracts line the margin production. the sequentially. words, from since flat

Excluding merchant cost which pass-through, all in America to by basis basis points. Note has impact XXX operating a across third packaged the segments, experienced at margins XXX that quarter, points business negative EMEA and elevated margins. had expanded led power cost

as spending recovered be in project billion we EPS of year, gas $X.X EPS quarters. next from last this growth. However, and of $X.XX over of X XX% double-digit sale goal increased of million will primarily stated on due CapEx X support increased CapEx percent to the $XXX continue the to to of deliver XX% the backlog.

to includes reminder, provisions As with and most and of the in termination of Inclusion ensure Furthermore, fees $XXX explicit growth, growth million project million definition a base to $XXX the additional network backlog contract the CapEx requires unique increase density. investments returns. the a Linde fixed stringent of is assured industry. customer investment

investment like hands, been We've at capital which Slide It for our safe flow in the knowing been X. allocation is true because working to want shareholders and with what same think, always capital cash well to capital During uncertain policy at of generation further matter. some starts decades. supported times core management's night might Proper today, cash does following management sleep have the operating quality is their operating generating contrary rhythm. on

the the Therefore, the recent coming that to flow had mid-XX% low remain EBITDA cash with which most the ratio we've in billion. at $X.X expect trends, year in now stable quarter operating cash half the to the some see impact to first in lapped. can we range. timing I tax You Recall of

dividend, While investment time-tested to our for the surplus grow and priority business, year. mandate for into is industry-leading the capital used balance is strong repurchases. stock cash cash to has value-creating the our our ROC the markets. is opportunities generation sheet, year enabled during achieve Having and enables consistently to share invest repurchase maintain an turbulent program stable credit A an follows rating a investing active After into after This criteria, business. Linde which

stock X. cash new optimize and happen repurchases recently with stock best stock is owners up balance manner. I'll us program, repurchase on markets This to to allowing capital robust a in flow a and wrap our equity return continue tax-efficient fact, billion announced market free excess to we dislocations of overreact. take We'll advantage In sheet. when our why $XX our guidance Slide

full with implies end updated a range the of $X.XX raising a For $X.XX. $XX we're guidance range prior of fourth XX% year, the guidance quarters, The rate. to to to full assumes growth improvement. sequential upper economic Consistent no XX% quarter to a $XX.XX, representing year

improve including and to we Excluding X% seasonality, sequentially FX, taking engineering are to base the due this range. volumes, midpoint is down timing actions although project

As while Linde compound knowing to now which in global commitments. capital and call let be And the alone predict manner norm run volatility in Sanjiv a these properly tomorrow, delivering turn any the environment. I'll business next executing will be owners mentioned, what year, uncertainty, appears sustained so assured navigates for managed the happen must days, can the to Q&A. can will over strategy rest our one on growth no their we while

Operator

Instructions] [Operator

will We Leithead first Michael our from Barclays. take with question

Michael Leithead

clean green in macro you risk bit some think start, Sanjiv, to a of energy talked about ambitions. been bit appetite. pullback a there's the rationality I maybe a maybe And more probably impacting some in economic space, crosscurrents

potential you already products? activity what's how is Or changing backlog, in bidding if your discussions maybe So clean speak this energy versus beyond can year? are maybe today to all at earlier on new

Sanjiv Lamba

had there and risk and a the that you're that right you maintained in our is previous to to to always I just resulting going calls, energy ones have clean conversations Mike, a the technology some though say have competitive we've position we've that from projects Thank, of projects, myself market. bit that up of off that on move the and forward. repeating at scale are these risk a approach know in are

solutions competitive to for customers X Tier exactly who many do of are at we are but I that today to to on that want developing a work those have reiterate currently also are decarbonizing, looking with projects We cost those And we that. track seeing reasons. commitment

of terms very numbers. you continue feel in where again, happening in decisions reasonably we've So gone say confident about I had those billion see about U.S., a be past conversations developments About a XX-year and investment period. over strong about of likely in the the to fairly proposal activity, I market to that, $XX of XX% I'll robust. that

more appear Alberta you few good years. validation I And towards in the ago, given outlook I've of is Jim of billion year. to decisions that FID their of about the and are would Mike, on on as a that projects $X I've Again, terms just the you. One call most in past, comment. number the end fact over working to that recently, tracking that's of a in last that days the $XX feel earnings to between currently pretty all moving have said that near outlining next couple In anywhere project heard about billion well. term, be The we of the Dow's path.

in renewable around investment be of us. there to You challenge. be number green developments continues energy make renewable impact a heard said there that hydrogen. a I've are factors for this to green. me sure to few environment, electrolyzers -- times, the in is And enough that continues past skeptical produce a in available energy One, That

energy past the Obviously, projects as up and cost-competitive lacking really see technology energy point in deployed in I years at that's green away, I've the also developments inflection, scale available maybe a that, that of a green is those I X to today. probably maintain scale, feed and at out be from to we X decade and are to meaningfully and level transition. now on when said expect

Operator

BNP. with our We Laurent next will take question Favre from

Laurent Favre

And productivity wondering about I term? got term? a question on talked this was China. about flattish about you feel the medium and if you is at resources Or adjusting I if Sanjiv, that's a are you comment all? the also how near volumes.

Sanjiv Lamba

Laurent, that's a good question.

we'll China So of think the is -- little in kind I and what then as don't medium why it well. a let a I we today, happening see as term you for just me about give feel bit talk

in X this customers most So in competitive on recovery, road term, downturn. the is one I'd of field that is near to you slow supply quite a Tier to China, have say the that through good their and things in stable are the we been which

Now, me bit more a but production was kind much color Sequentially, seeing some pretty I'll the let chemical start markets we actually begin of give on with Chemicals year-on-year to you we're of that softness, saw with. over end bit of there. flat.

I few And bright of and to see by -- bit have into excess as and the a you're September sustain as know, the I'd tailwind more curtailments the to half of shrunk growing is And mentioned play steel. On at in to we're been production about been production. and lower where a this bit stable, driven you view crisis, that happened see it, year expecting chemicals is a chemicals little of Steel For manufacturing momentum sector. expect see China property spark EV and It I mild well. Steel next year lot in movements the expect and as of external I moment. a expect ship the to Manufacturing, call consumption improve expected We environment. that volume's more in sequentially XX% are cautious I as near one that. own and term, steel impacted next have sequentially that times seeing they domestic in likely play first into PMI potentially first that stable. result in which we're has space, well. QX, a of but I'd out through half winter. their on recovery the of not XX.X% positive QX we a weak year-on-year. year-on-year in EV turns now. bit for output a QX. for momentum volumes again environmental kind most around, have production into Both Automotive shrinking. say unlikely the is by that been now, unless probably around of largely There's obviously that beyond. at Obviously,

expect the remain fab well. other to as in On weak and in output hand, weak Machinery the metal QX remained third I quarter. those

Lastly, Electronics. sequentially have but Volumes stable, are last below been year.

As really said into we kind you electronic know, on-site of ahead In was I volatility we've around before, quarter. the QX, at potentially improve chip Overall package, the merchant quarter. see expect volumes X.X%, We gases and output did and are remain up go the around in last about that it as primarily. rare China stable. level to it in

But moderated look X on a term, expect view, X to X-year come horizon, we a for horizon X- to be months to Laurent. If midterm, to in if you I at coming medium view and out next around I to that's happen of that X-year the more recovery take growth of in over do shape. So a the back numbers kind to reflected see if near-term a that a I IP obviously, lot has X- get. I we'll the -- or that see China, that mid-XXXX

Laurent Favre

terms are you're resourcing? the management adjusting you business so and way -- Are running of you at the in all structures

Sanjiv Lamba

Good question.

to Let is And the that yes. absolutely, me off finish then. answer that

focused cost months than treating on mature reoriented got We for one now, team that done China as have productivity, we economy, management. are a Laurent. XX are more where and We've pricing,

given. I want XX invest business any do to us, look what now it's execution and what needs pricing, day, the focus that's high-quality while a we constantly comment to cost in look opportunities of every don't China would manage some at itself through, investment business XX to business We on ways, today. that that conditions, as months align continue our doing management criteria. we which there expect our that meets growth, started mature handled, growth is to to we to good I that and because So believe to at be fully for come we productivity, should and ago we for that market to and in continue on in

Operator

our We Richardson from next ISI. with Stephen will question Evercore take

Stephen Richardson

Sanjiv, the the of terms And project? I Indian about was interesting green are project around Tier maybe particularly mentioned wondering if talk you the maybe wins projects hydrogen specifically X these could customers projects and some that specifically? recent you partners your of Australian and just disclosed, in some risks relative of the to what Oil have

Sanjiv Lamba

Steve. Sure,

those of both So announced. recently wins

So large at to Indian a really good hydrogen did obviously India. in That's Oil supply Panipat. a a our India winning refinery in job entities in premier scheme

Indian growing infrastructure running you the pace. hard most of market well is refineries As as projects are the and know, of large as to keep kind

see So that package. full good to holistic

We're the bear. refinery And gases kind the expansion are relationship IOL plans. momentum of to continued their from we into as and given capabilities technology they we're atmospheric Oil, their operating with appreciation hydrogen our and providing package them we that that bring as to again, of Indian to go the as well providing of seeing technology strong that or

power already also years a at of for number supply them now. -- We

an for study storage doing electrolysis and a XXX hydrogen-fired moving really, result support far some FEED South that It a them a peaking some they're to the we hydrogen of of as of provide South over What lot of interesting very them. to Australia. closely hydrogen to project. work plant. build to here. megawatts the As that, peaking Australia past-breaking We for to sector. trying FEED give a have a as do was concerned, now study or And I is essentially credit plants it paid with government work is doing of power power are into is kind

peaking in is in for We're discretionary more to with take to project happen. jointly. project investment to is successful with we final power plant Now as study the the a bit to together a work what assess that hydrogen a developing ensure the know, partners decision. will a player that reputed FEED that's required you And a can is that working really once we We're FEED doing provided. a completed,

Operator

Sachs. Goldman next Fischer We our will question take with Duffy from

Patrick Fischer

Two quick questions.

year, then is into First, when or to and $XX billion second large year? look remaining. to X the next relative And is the history, -- projects you $XX next forward be new additive how had should you buyback already very

So Why what anything. maybe we that read I flow pace into far and such of size, cash should as as large a Just generation? buybacks guess?

Sanjiv Lamba

let I'll those. Matt cover Duffy,

Matthew White

Sure.

and backlog, So first, we've -- give next this I that as year, you But in will us $X.X we've always said would that, you see billion say continue. of we're at past, we'll next should a of stated felt that so at little kind backlog giving reason close know, $X.X now above no growth. that $X with so billion, guidance X% the I year be that. why give look and Duffy, to when we the to We're billion when EPS

on focus the pass-through, always we tolling or backlog revenue to vary can based the because the of on on whether energy. right, want impact And growth it's EPS

through the revenue, pass will know. it makes as which you energy Sometimes higher

how look the the it terms returns at are revenue. and Sometimes in be we lower consistent it, tolling, consistent. conditions we But take will are it and

the fully on perspective, X% or we so EPS expect top so that from backlog. with And an

As the also as we've grown. far buyback,

should our been. is have that. $XX consistent pace should the what I how at programs buyback be, of be it with remember about the to use how have think the We And prior

already. So you been know, billion-ish $X we've quarter as per

growing. are We

Our cash strong. continues quite to flow be

that growth program, business. criteria. investing seen just the our the us explicit on will we announced our while any will year. But give in so the with meet and for prior has our expect to would for example, in did date we've this, again, It in go And to always $XX the last that billion I priority this of be be consistent through we beginning timing not what

our ample amount excess have program. every of can we not that to capital view pursue criteria, deploy significant we only but that a meets we obviously this that capital So towards project

Operator

We will take our next Zekauskas question JPMorgan. from with Jeff

Jeffrey Zekauskas

goods But underlying X%. million pass I cost there's real look to $XXX $XX.XX know XX% goods of that you line, decrease could in about at on through went fell and you from know that revenues was inflation can sold the whatever more increase you basis. I was which you sold? your and of there, and your much talk to is I When business down cost went it hoping why your was Now quarter? analyze profitable in engineering cost $XX.XX profit a was, gross the cost you revenue the the

Matthew White

that we than enough dollar for have I'll our to -- I'll the Matt. dollar start it's number that, point, is have amount to translates with dollar, on to to So you But goods full pass-through, exact obviously, walk the a do Jeff, same. X% response don't smaller okay? we COGS. And know. of Okay, sales, provide cost but as you a your some so time but I is think the

create create some that. On percent point, variance that of that top so swings it. will So a of to that your some will larger and on that, will have exact based Engineering on

X% to due the were down saw sales project timing. some You Engineering

is have you GIST. remember factor to Another

all But was disproportionate effort lapping that we of also a very the tremendous high low-margin know, we aside, a at divested the a would When been variable last of is fixed it we energy while our productivity. has there itself, sort like through So contractual factor it energy business pass GIST, amount quarter amount did, ratio. this of that. consumption of on escalates kind passed through as and in COGS. Those you on cost a GIST result

are pay are to we pocket to But have if efficient, for we So if that. able inefficient, we that. we're

on. emission much of we to on lot investments ability so reductions make happens been cases, had a also Scope also more just X Scope and our which in efficiency. This the focusing so And we've X

distribution, gas we've more so management, combination done be given this work opportunity an inflation And power to between has variable on us on efficient the management our done natural with costs. on work a the we've

is is this. on And another that also so helping that component

not So efforts has there any view these no cost impact we're be, will is on efficiency, especially variable is world the the what the be as profit. there's greater. continue sustainable on But Obviously, or more in to a basis. inflation nothing in but anomaly pass-through that payback there will a pursuing going that where opportunity to I pass-through because

Operator

we Begleiter And take Deutsche our Bank. David will from next question with

David Begleiter

it? on flat are Sanjiv, are it can sequentially? you And you pricing in price that pricing? still sequentially discuss a you we'll at I recognize still where Where the getting APAC. mix was But basis, pricing and leave getting Americas that.

Sanjiv Lamba

David. Thanks,

in So talk we'll we with let's power come which made see in you through. we the in and pricing. Americas, see introductory costs, that that see we the remarks off just expect because typical over to past, about talked next did the we've the that That's lag couple recovered of quarters. Americas the a about I'll start that in heard spike a

So just put make to that's sure that's aside.

into the at be what we've about plays pricing basis. look on as taking a the pricing we've us, that reminded view sequential and of investors reminded long-term our to globally-weighted should over you think here board, CPI you And Now about its when again, is you for as broadly thinking correlation I'm movement often, well. long-term across you the very because --

ended year-on-year globally-weighted as at up CPI ended well. our pricing about up and about X% quarter, at our see you This X%, can

well. there trend, the recovery that couple sequentially, playing over of of So see Wherever continue we we said, that And you'll that's again, happen movement. out a anything I out. taking as cost of more that expect add? to to long-term what's kind we and increased see than sequentially, to levels, ensure are place. that's next see reflection is the as that quarters In Americas, Matt, to

Matthew White

Yes. what add, well. of a We're a David. Sanjiv. footing I call I'd and Americas the Thanks, of bit rounding would in just victim as

about sequential go the calculate volume, to sales sequential rounded actually pass-through X% to it it to rounded so But all change, improvement. and price like But had you to of to to X%. when X%, it So comes one X.XX%, down them down. force

are actually a price in Americas. So getting sequential we healthy

X.X%. just to think I footing like rounding numbers push given the X%. we it to work, had came to it the But make to

So that is, given it and X%, it's Sanjiv's expect what to trend would the says inflation we X.X%, while it's a really point.

Operator

will question Peter with from We take Clark Societe Generale. next our

Peter Clark

Sorry, you're anyway. by DOE of the announcements But which they there slug I X. is production in one not the on mobility, first U.S. are and cannot there, I probably on hydrogen of I restrain involved think, quite is industrial targeting lot a it in. hubs, a and but myself. was know focused I hydrogen the don't have some the XXXX. of

it's think I XX%.

XX%. So just on then this. And over wondering of the something ahead from about ensuring EMEA there's now returns your views America, that? presume question, I second margins

anyway given your mix, where think they the I highest so forward, region points Because think moving the confident of it X,XXX jump. just Structurally, I should up but just the you're obviously, you've I from be seen the they're that. basis XXXX, from margin know momentum you enormous really here? delivering on see on old Linde this platform. views but

Sanjiv Lamba

Thanks, Peter.

actually off is remember, in density. be forward as a how We is about in been built did also we involved mobility will around market announced. are therefore, and others. network participate we've participants us, But awarded hub, we development hubs think believe our and all the them, in start the DOE with that where of of that one Arches And California, were which we Let's we have the for a of are Peter, that participating in business the core business the going meaningful, few we and that. of on

put and the stakeholders the go hydrogen course, job that multiple there's you has have hubs that's as of development we really ensuring one around of a a done forward, apply remarkable but The And reasonably well. proposal to in to whole structure asset projects. this that and the test kind positioning DOE get that those funding long still a involved with and to way putting complex to of

participating in selected. be for we'll there thought in our the developments, where been our in are part but us was most hub watching out those that's of business So we for impact we California,

So just much in that hubs.

above talk the margins a profitable right. you're about least EMEA, mean, milestone. should I XX% major be. Peter, and it at the around EMEA are EMEA Let's your most region, recall, comments past, being in is do I or

now We it demonstrating be. that are can

XXXX, in you margins recall, the to were XX.X% go if that You'll Peter, the EMEA baseline. back

they've up that, from So consistent. X,XXX been and points it's almost come basis

a that while you grind making the been I where all It's been the and that's about the watch from EMEA sure time, businesses you know, in of not think we of we everyday, density extracting do that been choppy. the we It's And talk sure process, hard come value -- for full pricing making all out by, really, this enjoy at worth are. growth it's a model net that's as and productivity consistent and opportunities we're the is this high we heart applied. the

I So feel about that. pretty good

to that. ahead, doesn't I expect hold path EMEA to expansion gets the to, think Now we'll you mean basis points ourselves to down the that just we overall, Linde, continue task and I'd year XX% be because XX of XX at it between margin looking giving of every wave

improvement XX that part -- will to year. actually they to they every think we XX as deliver points actions that of look at ensure all basis for work necessary that the I

Operator

from question And we UBS. with Geoff next take our will Haire

Geoffery Haire

you. I for Matt, have quick question a

for lift think guidance if I of EPS I to prepared mentioned year. some understood you give actions wondering potentially you were taking actions on this those details end you'd to at your top remarks, end like if range it right? what I the the was the are, that of

Matthew White

Yes. Sure, Geoff.

his As remarks, mentioned environment is economic Sanjiv had the challenging. in

on we of agree to all given ahead that. can that, we have get think I it. And

was most do things doing China, certain to cost the in It actions are spend can on have but up focused additions. to geographies, earlier, on we discretionary affected. taking discussed like tighten especially we're those things, where in headcount be We very we to

well actions look need And this on into were, start we ahead prevent more We've very when when of heading it's get we into any done get severe but approaches XXXX. prior as this We've this. done a to we when XXXX. ideally see not only in to if situation, done back We've early you frankly, conditions. for can similar years slowing further

that best, global discretionary will the while So spend, for that's as prepare will what happen, across what better to go about actions don't need tighten the on and be and worst and how significant down we're Because it's taking essentially for know for such headcount, prepared we hope we to happen. to this. a efforts

Operator

We'll question next Andrews take Stanley. our with from Vincent Morgan

Vincent Andrews

did you Americas the in impact from that before power margin the issues? Matt, the mention

Matthew White

tend the to But We you an with did impact merchant situations, the had prior and had specific it consistent we give happen following in especially occurs, to we unfavorable in and spike will United And not here States. you quarter we've States. then recover saw of package margins number. again know to take as in the probably the spike, in power same situation the quarters. severe what we the X of southern We power fully a which expect part a in X pretty United

Vincent Andrews

without the been than Maybe higher I EMEA Would could margins margins this way. power space? just America's have it ask

Matthew White

would free handle. They have a

Operator

next question our take will Vertical Partners. from with Research McCarthy we Kevin And

Kevin McCarthy

Sanjiv, would impact competitor provide U.S. thereof both of operations in that forward? you you your the lack as and latest assets, on that expect Russia? fundamentally or your in related terms the at thoughts any on reserves material of upcoming auction have to As market helium market, helium moving would well

Sanjiv Lamba

Kevin. Sure,

been I So to continue market a market tight. that's you volatile. to expect as helium helium, be reasonably been know, has

fundamentally Russia. You've seen term, back what's to There's speculation prices been the a I again, not of of going well. as change near anything around see that in reflected in do out And Kevin, that. the that's happening lot

Just on in that contracts canceled have we're Russia, with longer we project. involved to our to no call and the reconfirm that everyone

to that helium And movement through. there Russia continue of supply any just of are in will terms out project including well. That's of Russia chains coming of will challenges near technical term. given go I suspect as sanctions, of reliability the expecting that out increasing what around kind be product expect always of particularly I'm

helium already, a think I BLM is have that trying less it going the and role BLM. many would be around people a over It know divestiture less of important undertake. XX infrastructure the is far process. view is long, As is There that BLM our out complex litigating than will and competitors as you is relied with last I scheme the back is some litigation my expect concerned, drawn-out that. one that to but years, years. larger have of it if But in on you much X the today a smaller that go globally, to plays government

So people have kind in. of factored that

developed that factored we are understand gets how the Our all that supply in. understand view and chains PLM a with we limitations,

wrap going market. kind up I think don't think of kind just anytime saying a of it's by tight I I soon. expect long So

Operator

Citi. We Cunningham from will with our next take question Patrick

Patrick Cunningham

Electronics, you do pace signs half. weakness current the pointed see additional What drag some given the quarter? And On in we fourth in of the recovery recovery you of sequential expect visibility? first in the should also to

Sanjiv Lamba

is coming Electronic stable, be Electronics, special mentioned stability volatility electronic X around next Patrick, but this high-value think movements on, quarter my sequentially which about recovery I of into my Again, volumes, So you'll is to is through where beyond. middle you expect think largely and that year move. been. rare away, see QX expect that's and should sequential going that the as the you I some that, the expectation flat, most I separate into when held The largely has that some kind is earlier of includes around gases, expectation remains on-site volatility potentially should way is gases, that inventory It's -- on that of in to pieces. continue and

that at you're the market obviously the been recovery around on needle of to has pricing. DRAM, kind don't moment bit little seeing move Now that's by Logic itself. a a I of think customers, but next on stable, different significant will more from that, when -- half expectation that lot volume notwithstanding we've reasonable based growth. result or feedback is that my year a mid in recovery enough had

Operator

We will of take Byrne with our from next Steve America. question Bank

Steve Byrne

you allowed ask the in Presumably, year. aggressive it margins? made density of was in where footprint network acquisition the those couple that the are located? gases. want now plants? times that a get stores you earlier you the to call, leads U.S. in have of integrated more mentioned to to more and enabled yours your even this change packaged about you your nexAir of to into on and acquisition me Both a -- competitor any has stores of Are Has back And liquid you price

Sanjiv Lamba

me let mentioned just Steve, network -- density. you

live density all the how And bit think just on going about breathe talk is then and about we to for sometimes as talking granted. is so as spend here, it about far minute Everyone page, detail. same I'll definition we that and nexAir a so network we more I'm a concerned, take it in

Let's and network margins. opportunity is it what serve, -- out stands But over enhancing an network has about density, creating just core cost when you a that there your leverage economics a dense that to to you fully that about to factors. leverage is really, product, think that combination ensure optimizing and look of at

If a you think -- that. we over obviously difference and not what isn't, how see that is the way network And about density would it all targeted optimize network serve scattergun of have we do a a place. it's density the customers is of were we It's visually you we density approach area think small about the rifle where to it, it's intense shot.

we kind think of that's So about network density. how

that play acquisition. the let's Now, nexAir into

acquisition nexAir is on than headline better expectations forecast. performing the So and our

pretty good feel about in gone having there. I So

we able own the the out and Now rest to of buy in into a did have minority integrate nexAir it it back was nexAir -- to now holding our were fully and we system. shareholders

point, process we are integration. that So through your of going to

are in in moment. the South investments, We grow at a U.S. the near-shoring or of aspirations their is attractive very the them which given particularly re-shoring seeing U.S. that's sentiment in the market incoming lot of to A supporting the there

that fully we way So through. kind we're seeing our working X benefits. of Obviously, there are are some integration benefits

have cross-selling into go opportunity revenue to to now serve playing being where some existing that and upside that that big In that, for obviously, a is network density we by addition and market. nexAir creating the role able exists

And with our the penetrations the at space, we network reach and where new exists that of sure happened and have we're to as optimizing the over between at. investments in, happy large that extent, theirs, stores that complementary continues there. nexAir And wherever market expanding to it's ensuring looking we're opportunities pretty grow. in All and some a acquisition thirdly, density making

Operator

question And we our will next from Alexander, Jefferies. Laurence take

Kevin Estok

This Alexander. on Estok Laurence is for Kevin

being guess, hydrogen. current of projects And So how levels? I of move many you've are from could be as more touched those I rates hydrogen guess, viewed insensitive if how many maybe delayed continue to sense to higher any on likely rates? to interest

Sanjiv Lamba

that the case there pursue are again, make the before these at mentioned the time, it said I carbon emphasize want projects, and of I that particularly hydrogen these in despite easier projects the an most capital and point progress. ones to I to that those, in well, define come and economic continue low to So as good I we I'll incentives of some find large out that want again, projects, blue IRA. is definition, the And just rates finding this that interest given inflation high I'd marketplace intensity are projects. as cost to for -- hydrogen while But consider

kind of you technology see we're until currently of years track provide where They're a momentum of point X of scale and -- partners, those you for said this well. customers the a on shape a be the where competitiveness projects of to inflection is in larger larger at a there point X tends product all lot solutions are energy of green on technical The or our more mentioned of that that progressing toll, the developing expectation, scale factors and isn't comes out for we renewable development any backwards projects fundamental lot the taking support, form. technology support front. not these. At So that these I in and available obviously in isn't I that time, around with to before, projects. that hydrogen my given that challenge, quite are policy any in think, there and development hydrogen green all for seeing

Operator

we And take will now from Fargo. final question with Mike Sison Wells our

Michael Sison

given you're EPS, you the have in a Just tough of growing you sort it sure new would And how stays growth in demand you grow if a 'XX, same the the volumes? negative can there's have run me a Can 'XX, growth seems of but now like growth doing this to it's is through algorithm, mid-teens. of if maybe curious, not and you're EPS make given I volume understand guys told year, lot range do that? environment you in

Sanjiv Lamba

know here, walk doing remarks introductory we've be that Mike, straightforward, as referenced We I'll algorithm you So growth. in expect EPS and and gone of The to well, as and percent is of fairly forward. you kind commitment you us of very that's growth is earlier confident made our a key should that you'd what XX-plus move No percent. the out are we that science we've ensuring growth that, that to expect. There the feel X XX-plus track and as And in levers delivered record we years. that pull EPS X that we beaten rocket X quickly. obviously, that making commitment of last over through why

Let's start up the with backlog.

the larger and grows, it doing, that terms backlog expectation grow our Our you've seen been as is we're annually. backlog of has our in projects growing

will our growth. As to you see of EPS it see that you X% contribute X% between grow,

pretty has a about. reminded feel as into Matt remarks and stringent high-quality well, very have as not with And the MOUs projects growth you that contracted definition. good we put We customers, developing strong, do backlog. his in So LOIs we

have we guaranteed in. recognized a for contracted signed flows future in only is with when cash the contract place backlog Our

X% that's coming growth EPS there. in backlog, our from So terms X% of to

big consistently. pricing to to global We pricing you again, we've expect to response in give lever is combination ahead question I've should of that slightly have of X%. said we us that and The CPI, demonstrated on us pricing. and productivity X% of next will a flex productivity. That weighted a combination and that a be earlier between

we've years, and conversation said of inflation. previously, are reminder, inflation easier. us been there the that is we've flexed that go out well. in inflation as We're gives track have we've happy know track And to play have a and And we we last bit you've a well, always high -- But quicker You in that pricing we've it's we've pricing. a years, of our over and bit we when just know It last We the seen pricing, a ingrained record of to well, inflations, of developed record little opportunity will play. the XX-plus that than we kind environments. Obviously, again, over many so on organization. also the XX,XXX applying we positive muscle Year-to-date, projects in path. On track projects. continue you what this line. results projects as and get A deeply DNA well. bottom delivers drives a in earlier have the productivity productivity, that down the thousands we replicate XX,XXX done, more that get reduction ensure the year. validated, And on us the year, Every that's to and them, play consistent to we run relentless expect action those referenced that COGS them. to question in Matt sure make already

even are growth out want we lever not is do current I not on that that together, you negative any X are remind -- climate, another in volume. our that. There said guidance. even marginally at the are for the economic So volume we EPS of even X% of earnings, today, that relying the end, of to in midpoint put guidance at our at we've top Look, earnings X% the come is help expecting at our we X% which moment to sequentially. those will in

when growth back deliver to that the in look growth. XX% happens Imagine grows a are able EPS of numbers tailwind, able XXXX, a bit have to We what and to about. and business that. at you being demonstrate go we the volume we're talking that and we be demonstrated have resilience EPS these

EPS from it's push that get helps we growth. that we But XX-plus when really that ourselves good without you've traditionally a seen. volume growth and today, that that committing number us even beyond that lever the to So are activity, a economic tailwind percent earnings

uplift that cash program, share of Again, buybacks. our project part Matt followed. around of of and We've will conversion surplus There $XX every gets that in in percent. invest the mid-XXs allocation heard making of XX-plus into the are to is about you've the swept growth but we that got as we altogether, cash provides billion policy this I'd buyback say, into $X.X a we a impact solid high-quality to X% you all good outcome about terms And And talk business. feel in. can, really, in billion in to an capital is well. environment share Putting economic EBITDA. said plays Again, that. of low pretty EPS sure whatever that, it I announced as final you an lever is we've heard quarter, cash across that generation the really

Operator

Pelaez would additional the to I turn like or closing call back now for any Juan remarks. to And

Juan Pelaez

for call. everyone, today's in participating Thanks,

feel me you reach safe have out to If care. to Take questions, further any a directly. day. free Have

Operator

disconnect. ladies thank conclude you and call. participation, that gentlemen, your We and conference you today's now will may And for

Linde (LIN) 26 Oct 232023 Q3 Earnings call transcript