Linde (LIN) 2 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

Juan Pelaez	executive
Sanjiv Lamba	executive
Matthew White	executive
Michael Leithead	analyst
David Begleiter	analyst
Patrick Fischer	analyst
Peter Anthony Clark	analyst
Vincent Andrews	analyst
Laurent Favre	analyst
Steve Byrne	analyst
Michael Sison	analyst
Joshua Spector	analyst
Jeffrey Zekauskas	analyst
Kevin McCarthy	analyst
John Ezekiel Roberts	analyst

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Linde Second Quarter 2024 Earnings Teleconference and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I'd now like to hand the conference over to Mr. Juan Pelaez, Head of Investor Relations. sir. ahead, go Please

Juan Pelaez

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

me over to now Sanjiv. call turn Let the

Sanjiv Lamba

a despite very growth employees again Linde once good industrial everyone. morning, high-quality and of stagnant delivered activity. trends the Juan, global Thanks,

by our XX.X% what operating quarter on unwavering of Second XX.X% highs, control. all can the we XX,XXX of driven and reached $X.XX, of efforts employees capital who new manage return EPS margins of actively

And a to organic out it certain played relates challenges the described being X% to industrial us regions volume this has improvements. Turning had initiated volume trends. value That growth. expected. to said, macro. some most you'll the flat why of actions year-on-year. any in quarter we create in shareholder the potential part, for notice while seasonality, which quarter, experienced we This were Last self-help environment. volume sequential current we And enable is the as

a positive still not is are sign, the any guidance. meaningful recovery economic we in While assuming this

as I to this environment, this believe But given may take Some approach. overly prudent it's view cautious. the uncertain

our will then, this pricing recovers, proactive supply to with us when network Until to density volume will industrial in existing that actions earnings As we activity disciplined additional continue growth environment. customers. you know, our new ensure enable to and and

provides continues Food resilient end at total packaging year, on Linde's approach. safety This strong trends. for growth end ice foods, higher more beverage X% meals. color for frozen and X market systems meal food in Starting with the markets. over convenience trend consumer-related attributed includes Slide dry more part and prior as services demand and growing delivery opt innovative for growth consumers quality

services dine associated grow out. consumers and carbonation to continue beverage as addition, In

of Our of there's this per decline Due starting Phase on project supply of versus with our removed earnings the net is prior half the driving for Phoenix, to more than one a backlog, healthy contract. combination and JVs a Asia. consolidated electronics In represent started end growth backlog supply number, this The sequentially nonconsolidated base But by year-over-year primarily in U.S., the growth X% and in was as Arizona now in frequently I've up the Taiwan. that sales over from been X% to driven in and TSMC. our not project start-ups sales. a project our are this we CapEx portion and system this, market that included said time quarter. of that substantial always XX% U.S. turns projects backlog slight contributing has X

Korea. volumes U.S., China and base in moderately addition, In improved the

we this As last signaled was from quarter, know the you possible.

will rationalizing year down home with to some our to especially volume care sequentially. States. of volumes demographic encouraged trends from partially efforts percent underlying Healthcare starting that this quarter, primarily pruning due Consistent now. the to to mid-single-digit flat prior business offset I'm don't and We in still that. X% meet is but criteria, recover portfolio drive -- see offerings, to the the products So last anticipate growth, levels United and the is ongoing continue service

and from industrial X% the as markets. the competitive We Coast, supply cost to the their and Mexican end now Gulf rates world Chemicals as market. the North energy Energy some higher in global American Turning services. hydrogen of well grew production reflect the customers share most of activity, U.S. in their primarily

Looking project end of around market the largest the especially energy forward, this will projects. beneficiary be likely backlog, clean

which $X normal one just and infrastructure making progress. the pursuing and comprise represents and to construction American which automotive several a near-term mining primarily the OCI pipeline seen ground. from could While year-over-year, are billion opportunities there energy slightly is volumes, billion and be have that good North there Metals some opportunities, more over we of $XX not unexpected, growth down mainly example, more is markets. break we've projects although This steel cycle as decreased, serving future years, are the

primarily Finally, X%, pricing fairly up manufacturing the market trending end steady volumes geographies. on is actions across most as are

global aerospace with coincides production, remains battery end this like or some market from manufacturing flat. Aside production, sectors industrial which specific mostly

Linde value shareholders ability executed $X conditions, project near-term that uncertainty owners our longer-term I to ensuring an leading Despite our employees successfully confident leading growth. the Linde position high-quality growth, the delivered that remain regardless do on for do in billion company further while manage create navigate and for backlog business results to future the Overall, expect. of what performance they with challenging gas continue best, Linde's the climate. industrial economic

financial turn call Matt walk our results. over now the I'll to through to

Matthew White

second Sales X for up Slide Sanjiv. and consolidated provides sequentially. year were results from last $X.X quarter. X% the billion X% of Thanks,

minus X% X% Foreign first continue the currency headwinds both quarter. year-over-year at pass-through, and cost from minus to and present

on-site simply a to bill dollars. profit cost we and operating cost variance energy customers, thus has is contractual to pass-through impact no the As reminder,

remain a as against foreign headwind strengthen Furthermore, dollar U.S. majority likely translation will to currencies. FX continues the of the

due more are Volume to was strongest are remaining conditions. helium no from offset flat stable lower mostly from China as XXXX deflationary backlog sequentially. levels was from Excluding project X% inflation weaker globally continue base increases from the the and prices year trends X% Americas contribution EMEA. growth up as to last contribution over by volumes. countries weighted offset with organic with these sales APAC items, Pricing follow and the from

As Sanjiv a startups improvement X% trend if we improvement growth seasonality. But growth the project earnings now, organic will we in a of the mentioned, and organic for volume experience excluding tell further persists. sequential of combination Time did any are guidance. from

leading resulting margins profit Operating X%, expanded grew $X.X XX.X%. with of gas at billion segments of XX.X%. and margin an All in EMEA year-over-year sequentially, operating

stated or the the XX% converge X% increased FX current to excluding are there over margins, no we leader has why reasons many segment when each headwind. As cannot to time. improve times, $X.XX X% opportunities laggards of and structural EPS

of and Further be can X. details capital cash flow allocation Slide found on

billion, flow see statement, contract project operating which can at including million. of You cash see The to the prepayments. which flow is and the cash to you When XX% than year. that driver this prepayments last below can face unfavorable the timing $XXX engineering relates represents more quarter's liabilities, these the $X.X primary left, project assets of trend look you are our unfavorable

This quarter-to-quarter the of volatility is a normal cycle. engineering part project

interest the seasonal engineering effects on and projects, payments. Aside tax we seeing are more from

result the last regarding more as first payments, prepayments significantly projects. expect have well but timing bond more will in in loaded continued generation operating cash similar half which gas back-end engineering year. remain I We the This business, cash cash as per payments for volatility year. quite to once Overall, are the confident of tax of customer I flow, year. do of on cash euro

mandate continue climate, year-to-date, As far we'll Regardless the into a A capital remaining credit to the policy to funds billion to economic underlying the invested allocation, as maintain of investment to $X.X and toward our shareholders capital to every a into we to business. invest returned year, and time-tested long-term billion an a $X.X of criteria dividend business stock subject repurchases. sweep back while single to priority raising rating commitment the our adhere

X. with guidance wrap Slide I'll on up

EPS growth an For The to economic $XX.XX midpoint. to a or FX is the third full to excluding no headwind. excluding prior growth FX to $X.XX headwind. assumes range with $X.XX $XX.XX of XX% X% at quarters, X% quarter, this now guidance updated X% when improvement or X% range the we're X% year a when Consistent providing

full is. bullish the top by the have signs end, last leaving we encouraging quarter, For prior we $X.XX on activity. second half year, as statements on enough range the the to be raised with guidance seen while simply Consistent not end bottom the economic

intact if impact actions to the end So raising performance. leaving bottom economy guide the the worse, while will to incremental better, our recent benefit. we QX we Rest we'll capture the does are take it does mitigate essentially for assured, if earnings. that And

value, the at taking culture Employees proactive shareholder a weather and coupled results. have This we Linde, can economy. to on worst, the once the measures deliver ensure to but of our for to regardless to, disciplined we commitments industry-leading us relentless with Here the plan been world rhythm create focus best. operating have the again, around confidence uncertainty maintain for our hope gives

the turn over now Q&A. I'll call to

Operator

[Operator first Instructions] of Barclays. from the question Our Michael Leithead comes of line

Michael Leithead

Great. Big picture question.

results you we great your continuing talk say a pretty seem expect you've this large you digit growth year Just actions efficient and past through we're taken. this industrial self-help has job of look earnings bit some grow in for when and Linde stuck to growth guess I term, there's near to part, double out continue demand despite that confidence that, can a the driving your and percent earnings now. there right if just at your backdrop? environment doesn't gas macro in like peers, at a just much in few how we're the done it And no of already over years XX-plus baseline,

Sanjiv Lamba

Mike. Thanks,

right. You're

supportive What macro reflect we've macro maybe you the X this X suggest very seen now, quarters back at the isn't like think time. point is go to that. I or environment really in I'd

period, that I we've In call fact, what recession. over seen industrial

actions also only While growth does seen index recession is that the but deliver we've managed over the or we that the in we've curve ready And you most we these organization of cases, what right as on period, GDP not that through just the referenced, indices. focused around to are is take consistently EPS to very see ensure doesn't, industrial ahead our what people and that industrial doing. that debate production

One end of good ability take we different markets the to and see things quickly. is across to action geographies our and have

view an something MO is in My are that we well. from us we are that delivering where part as expect EPS period going is I It's of will we that exactly reason So the forward over that today. that think understood the have growth is you well. time. consistently extended on

a flex all. not muscle We I have you that we've provide able it's to growth the think play take I'll I percent about you'll spoken be algorithm that right will that what know out. most in a EPS lot how to economic environments, to to that's -- past, the if that good we think and see EPS and continue we XX-plus a Mike, confidence us gives that well, through

recap you. EPS I'll So XX-plus to for how growth. to that X contributors percent we there that get are

related backlog to you what The -- detail every X% But -- Backlog growth. proactive factor and explained half that of between to That the we practice to This alongside day. it. X% recap a to of we've is those pricing you we been more actions that. first, lot start-ups backlog to that all contribution consistent pricing from know that of up about of is EPS expect trend up and IPS expect to -- come happening the we I productivity. and guys. next in productivity. management to trending this growth in are anywhere see won't contribute and than is starting kind that and start-ups are to what say of We've backlog. X% I X% up, The

and productivity. to contributed So from of pricing about growth and X% comes that X% EPS

at obviously, assumed us has our And this say volume at time, the heard volume. Next, you've X that midpoint. in point guidance

can we absence the in we algorithms rebound I there industrial that high volume together, of So this business going Put effect EPS say EPS of XX-plus there's side, were growth, we in X% is a a a that and and And remind growth. contribution, up lot seen. will demonstrated to We've least, of about that even that that, EPS surplus business that confidence forward. But that on after have still stand swept in Obviously, little even little will we investing XXXX. with pick terms bit generate tailwind that We if growth. the a you've cash the bit deliver a that where multiplier is in industrial EPS we cash of uptick, activity. we degree but on buybacks, that a share contribute people XX% of into tier. able X continue a to our is with suggests percent not with growth in deliver they our year percent that of and a for XX-plus of constantly last

Operator

is question David Begleiter next Bank. Our at Deutsche from

David Begleiter

quarter Matt, and volume QX that volume the The X% hard, of at minus growth isn't sequential easy in even comparison was maybe Sanjiv in the X. positive.

growth we Linde for in QX So why see volume wouldn't year-over-year?

Matthew White

it's David, Matt.

point, I half. getting exact think in your the comps we the absolutely to back easier see

So to view little is prior of more a positive see improvement sequential on neutral But a year on basis, might because comp our a year-over-year you out no that we're laying is the easier. basis. macro just

you're even to you potentially macro positive just no year-on-year see against. still improvement comps if of sequentially, So to it neutral up in to your little could exact the because that point, result

basis. a on which whatever just bad. need and sequential good comps year-over-year But the half. no in taking economic is we'll easier absolutely standard on to to approach, basis. we're correct the back of forward-looking do or So get assume manage reality pickup, a then our the happens, That's

David Begleiter

than more And was order I intake or is activity lumpy, The months XX was but the just less or lower X it bidding one lowest, think, it's QX ago? I at million. question. $XXX know XXXX since

Sanjiv Lamba

is busy David, so there work and and front-end engineering a that is of forth. feeds so lot and are our around folks very on studies, currently in happening

get a study FID. the whether being FID bit tends busy. that taking very, longer a from we're seeing And front-end at to actually into end be little to certainly or at are and is we activity the the What see which front moving moment we into So get that customers seeing to delay it's a activity, piece. theme very

in time these decision just of get well, FID as an . are So to last large of some before they activity a lot isn't more yet before people little this call translating the we We've taking FIDs. seeing said on to projects. a

Operator

from Sachs. question Fischer with next is Duffy Goldman Our

Patrick Fischer

you of left, roughly Can we price that dig much about little away recoup go done? that's of think in you pruning you your think And care when out get on year bit the like to And business do that versus a health in little the in digits, have breakdown kind you inflation portfolio Again, year when mid-single what's then a healthcare? much how you and you other volume? can to traditionally, in that can businesses? bit, growing how needs do of

Sanjiv Lamba

All right, Duffy.

the talk how the So let me about a healthcare happens. pruning, around little we'll first explain bit what's happening growth then in

we So as on been as far acting been pruning is We've concerned, have looking at that portfolio. it.

the My You've getting last some those end see in heard about lapped by out. you year, is continue. speak us of the quarter. Those expectation it will the actions actions of

see selected part of I'd business, in about. of where on some term, geographies you both We that home -- So the is term that a thinking demographics Long that's as the operate. large growth. healthcare as well obviously care say drive should which obviously our hospital to which will care, is demographics business we what be long mid-single-digit expectation mid- and that support par, currently

concerned, As actions productivity this relies to hand keep is business level. that we an enormously and need have go productivity that attractive get to and we pricing that a inflation as margin far business find for the is in always will hand inflation and therefore, us at that on

Operator

Clark Our with Peter next from question Bernstein. is

Peter Anthony Clark

market, deal of just it's a probably in to to been related the XX% it's but could of plus But contract getting the that but sort quite I Air would has of claiming merchant allowing is come I that. know the sort impact it's questions, announced. years know do argon know quickly. access be where of that part that, argon that pipelines. to Obviously, the X obviously, They've got their tight, one slug could capacity that what I got have Liquide in was merchant ramp related, on it the to away. that availability. increasing pretty hurdle one Two but fit. the big they're return And ExxonMobil not they're of things capability

that you would right Gulf the you in Those access are more on But for your contracts. a to something pipeline is some sort Coast think consider than probably X pipeline. of I sold bit the out questions. them regions,

Sanjiv Lamba

Peter. Thank you,

market you therefore, is current growth one there U.S. is markets, our on demand as largest and know, So of side. the the merchant in demand

in capacity fact, are some putting see market period as actually for In the argon we on an short And well. extended time. we remaining of

their perspective, But The molecules our economics to is you in need my from So them. get done the ask with quickly. Liquide what Air is has market. it's perspective, a absorbed from market. fairly obviously, There stable growth something

bullish. continues reasonable And placed the will market as be the market expect comes it to in of I pace. on, a fairly get view at Our product

As I'll our over what the our see we've in hydrogen world strategy We give with underpins X a kind of just Liquide of far part have low the the from as network X to decades developments that developed comment view. period perspective, pipeline critical growth see continue access business being very or developed and the I'm very of is pipeline that and the exciting Gulf as to as a not significant in future now view in network that or you driven to carbon try deliver on concerned, particularly Air we significantly very pipeline maybe network be. From going we U.S. growth as growth well. it's where that might Coast. that the through

continue many that and that developed to did actually the that developing actually win to I infrastructure we that as advantage something with example, our very we've the and for make I with that OCI invested Gulf U.S. leverage ways, decades want lies grow over caverns we competitive So opportunities the progressing for fully project see infrastructure growth. on further, in business as and the sure us, Coast, we infrastructure and I in in for that X the with and are developing future using bullish building and in that remain we see significantly. an to us

Peter Anthony Clark

You with didn't me your answers. surprise

Sanjiv Lamba

Peter. is we good, strive what Consistency for. That's

Operator

comes Stanley. question with next Our Vincent from Morgan Andrews

Vincent Andrews

and think decrease of of unprecedented your rates business short seems an interest like ordinarily to don't sensitive, have in being pivoting it I had a rate increase time, rates. in period a as in we we're but now

this on balance all? what their customers' just it year year, next wondering your in think down over macro forward work on through at assume change -- rates move thoughts outlook your are on? change of to of and desire And do with you if that So will come would we will that you terms behavior the ability projects or FID your

Sanjiv Lamba

let you as passionate a and to talk I'll ahead, this going add Matt I'm to Go about is Matt. to then maybe very topic about, that.

Matthew White

Obviously, to rapidly, point, it's as capital is this nobody were know, Sanjiv. I obviously, durable opinion at large everyone most certain, as knows And speculation your Thanks, for an deployments. rates have on this interest affected goods, the was my opinion that personal you area mean, but we point, large like else. Vince, rose

production you've So more seen tend more believe Even affected interest industrial opinion, by therefore, Sanjiv my area. And that PMI were that tend doubled more an industrial when purchasing over like more To last in many changed have those in very And XX-plus and something sensitive. you the on glass, weak been plastics those, were numbers some that the cases, loans, infrastructure those in think effectively to durable the in into dynamic the the goods, of more and I kind in rate we've about more I metals, you think countries which see. of months, our then auto to enter some cement, the driver as recession. customers customers a industrial power was the that may that mentioned. world, loans, extent, home this, of consumer

incentive probably see of think was less various top lot spend you because a of I of lot tied I argue clarity. than packages government it that, bit normally a a on you would more add that infrastructure what up in needed little

in out. services. Conversely, noninterest of aspect that And consumer it I'm on now, was throughout stretched slow. But areas that starting at lack the so consumption, to stronger clarity -- is based of of seeing these the least consumer that seems sensitive clarity what like time

a your then what So rates And call to think we're customers of in they reasonable would the is function the a actually interest to point, exact but that are That's rates of some start it, was of of could way that's and today some little maybe you contract. to committed, capital-intensive were if clear through. that contract inflation. stability theory, some cause costs out hopefully, I If projects these CapEx high. define function a that what point, of recession. could on to the GDP FID which durables, a see the want And the more start do decline, do and reverse, pricing, it are purchases I the help the to larger at sign their some think because projects, little it bring more could real the which probably environment a possible, that finally and to seeing working

Nobody and these positive is projects move hurdle. at it speculative, it certain, how rates I view this over some lower the So would knows the I least to try of with but view would And at signature as that's final stage. for right?

Operator

with comes Laurent question from BNP Favre the next Our Paribas. of line

Laurent Favre

electronics around Sanjiv, is a and in question My announcements we mentioned of that while. I any was in you TSMC new up, projects start thinking that seen electronics. haven't

the was So if talk also, say on projects. opportunity about you there's AI from and centers? I here from for could anything see if incremental the can wondering you opportunity the data And or

Sanjiv Lamba

Laurent. Thanks,

the in in year. the we signals. to say of of these early of are balance in saying look, that to in you seeing happen call questions So quarter. course we of some of the early we But that, the have electronics, -- around course both the just recovery this buildup a signals something were of and that the excellent seen kind that last referenced those There is are I'd more still

about now. projects talk little bit Let's a

So our Phoenix. I of TSMC Phase in started we

our And Intel a plants, well. build other the advanced are We as building in on world of Samsung project in Taylor, the we're number around very Texas. some for

We projects also to starting the getting there terms back also as the we're seeing going announced see pick growth and up in demand, Asian growth demand in Asian of well. new

these and signed we a get you number but get know, see investments will we to new up as have that reflecting will So contracted, will see what signed announce, projects very discipline level expect of as as make contracts I electronics announcements a over time, these new out. you around high of investments, would fab continue those momentum in terms we of capacity.

then your to is also by reality requirements. this part AI a and be and AI in centers will industries coming the will a of that supported AI that moment. and will helped the be production have data happens high, shines significantly I point, cases, to the underpinning chip large out see will transformative tool markets, some the that little for at the in bit by be through And know But prove you investment fabs. requirements driven off by data driven and

in remains But continue long-term positioned fair short-term well that than more very expect will have the there seeing make are news that, today still of would investment. -- manufacturers outlook share that there. some that seen. are to very to I that I expect still robust, space. challenges, So our major large we continue being including you to to some large majors and be semiconductor some Obviously, momentum that win kind the

Operator

from with is Bank Byrne Steve question America. next Our of

Steve Byrne

about Yes. in in Pac Matt, the in business. you your remarks helium mentioned Asia your challenges

from assume highlight portion quite in of segment? can driver impact you is exactly about curious regions? perhaps would what Just different hearing more fundamentals stabilizing? the And Russian there? they exactly volume. the that Are there? either whether Or that you in other is erosion what see your broadly, some this it further in that's your pricing can do from the export is or is are they And talk in volumes Perhaps kind I corporate -- supply? you you're the

Matthew White

Steve. Sure,

I think data. of some just on things baseline a couple for

is So few low that Furthermore, component helium very us. that in makes point, the sales, molecules very, percent for just is put helium our pricing, to up supply-demand of your single-digit to the global of it driven. global truly is perspective one

know, -- inflation vast driven, given you molecule. to more majority difference nature it as our is price of the of a our but the products project contractually, helium As is that supply-demand

backdrop, I the different think the are most as from that seeing to Russian with point, you aspects APAC your regional seeing pricing of with pressure this So supply.

have Russian participation we Now no supply. that in

are We canceled couple using that Russian years not our We allowance of per a supply. ago. contract

that its But from you of can perspective, it China. is a APAC as sector. way primarily So primarily into finding is electronics consumer imagine, the larger of helium because

have supply, stability all you gives more it a always supply to when you and a expect the healthy And it a think the across been back case. say true us, the pressure. decades, in will electronics always got business molecules very things, sector with and but coupled some business on. has parts, maybe certain created the you especially those we been end given in global business. much about So going this, supply, like you case slower, to have But modes have still it have Russian to have eye of stabilizing, is significant it's have that way to Korea, continue you the you diversity definitely little and to is have pricing always and I would an be And move now for I all something the robust it's markets. to keep a this all it

of As far just as to clarify other the component segment, the helium what that is.

a we to all as of it given operate it the sell single global a helium intercompany since more of gas we So business, is global segments business.

the aspect segment. pricing transfer intercompany is the what other show in So we

in that So represented just majority of the And helium of plus will that's be segments. cost actual at transfer price the each be gas eliminated. will the profit a

the to tends the whereas somewhat to it other segments, gas that exception one down, up that the for more in as pricing. market pricing segment, reflect helium stable dynamics be in you in reflect tend end with swings So segments the more geographic gas will see cost or the of the

to as think how our structured terms that's of that how in about just -- we So segments.

Operator

Our next from Mike Fargo. with Wells comes question Sison

Michael Sison

how didn't about into and great Just how or that you and worse change portfolio your think Sanjiv, maybe and the the stuff? will change? How it will if do stuff, couple the strategy really of order curious, of the look get does sort ISM backlogs you think days. things third And fourth? the What last sequentially does

Sanjiv Lamba

All right, Mike.

a So into couple maybe that up I'll of different conversations. break

I that And when itself. a business quarters a think we that, in being that our the that profile of the And combination of recall, and ago in doing a think the conversation factors we about that the talk Let's have. business robustness described have you'll few resilience we'd I had that ensures as we portfolio business the we in explain defensive. -- Mike, sits

was through some been and in resilience So held part obviously And has that contracted have ways. business, said of many our defensiveness example, difficult that an shown Europe, of in as seen of the -- we that, that through we've the period I well. energy on-site honored. Contracts crisis as that's think really

our So that's one part of business. the defensive nature of

in and expect and not and are resilient X% so in to The end supply, growth that well. continued and that Again, manufacturing forth, PMIs prone as food markets growth beverage. so you I beverage, which that segment being saw year-on-year other the on see is we and to food

portfolio out and of Again, ways, be but that growth there. issues which of of healthcare, kind forward, to industrial continue the that some expectations resilience will now secular underlying to addition to activity. many manufacturing are what happens healthcare, going we In in mid-single-digit sorting

to the So resilient that portion supplies of business.

have again, of in streams we contracted levels. to that, activity rental that come in, Add respect

what got a happens business or various activity that that of in manufacturing to very is of where through respect these to everyone mechanisms, continue referencing the move reality nature together, defensive will we giving resilient nearly our In business all the follow you've contracted locked and at is X/X in of defensive You as the moment, that forward. nature. industrial that be is PMI

half up starting through done. working way between has I been The want again, to about is of was more year, in that happens the to half billion We're right? worth just our this other to what of question projects first And $X.X billion. part say, billion of your itself, We're than $X $X.X backlog backlog, that. already

date So that it's growth certain. contracted is a backlog Usually,

of through, is that that very contracted, we revenues of plans, So we customers Phase and X a we're is project part said and really robust and get of about before, going feel we start itself, and a on of with I stream contributing that the as contracts as project, coming to that's executing. based an growth off see in the quarter locked the in are backlog that earnings to respect good happening as through which this project, future what the quality we example, started we have. And TSMC -- currently backlog our that

So that. part of again, resilient a very

I you that at think think of you how resilience think I gives ahead that, underpinning we look kind looking terms the So about of of what we're to a flavor business. in

Operator

Josh Our with comes Spector next UBS. question from

Joshua Spector

the in talk you about could Americas. if specifically I pricing was wondering

your you think I of guys that source been strength it's for a and reported. have some competitors of

just you're some more within more of of curious U.S. on or what's semi-stable, acceleration two, driving in sequential So semi-stable more pricing south demand Central prices where getting with if the kind a I region? America of that's of pricing? that's that phenomenon guess, if And energy

Sanjiv Lamba

Thanks, Josh.

consistent times think go maybe just or are We've back We've we -- XX, and CPI what we number going I'm I with a has before, And demonstrated think done. over slightly and again, Josh, That great to said, positive back proxy we of aligned track XX briefly. going about to trend, look is we've to that go been extended weighted see at for So years. of globally pricing said actually go that trend very that pricing forward. and is I pricing the a period. global recap back across an us. think if pricing you period long-term ahead how CPI this has continue

that want think thinking efforts keep think and to because be yield to in mind results the Americas, So pricing that in last this, will I years of want just businesses. positive ahead, in through to trend our where I the the forward. Pricing we really U.S. just as in the again, about seeing I as looking is robust able are It's pricing continue well. as proven Latin well is course American continues a to as in our both over not in X truth inconsistent. that itself going many I we've as the trend you're quarters have to fact, pricing the we seen And and last been consistently -- you're

pricing the as are that's their All to make we're the Americas about we action In But regions. we're and shorter Both in time, for pricing doesn't respective pricing CPI say again, we get we think that is a I that is sure bit that that -- there finding in at got management the action that's weighted over would driving deflation, so think continuing how see weighted moment. that EMEA little think drives it. line. management in Obviously, the So again, globally that doing space nothing there's and over And Americas at the where is China efforts I tracking exceptional. well. APAC, currently to point help. pricing efforts is this is in I you push we've happening

Joshua Spector

I that's guess that CPI that mean think I the when CPI I to towards, on it's one and so it, look is guess know, up, X% mean year-over-year I that about your I on something just indicator in going pricing at up Americas your call X% Americas, is rate don't mid-single with maybe is maybe quarter-over-quarter focusing I merchant up, a basis. to what around helpful. digit sequentially, being level a and again, follow-up I guess, on more Okay. mix,

Matthew White

Matt. It's Sure, Yes. Josh.

of have America, positions I when about think have about have you South leading we every point, Americas, to in think to there. your you remember, country all which just you

or Brazil a you Colombia, whether are U.S. than Central got you higher to it's in countries see So are America, much other Chile, inflation see continuing that rates would Argentina, what scenario. like South America, in Mexico, you've

wide that higher you've through relative all devaluations inflation well is of track a the something Am do countries. offset know, currencies, aligned and and seen is these local to we that look So across consistently. Lat you and in at I basket being recently that just as mean,

is that. So It of that. it part is driving

that a yes, the little through continues create to It's quite tend we be when on But just seeing, to see elevated, may tracking, And inflation, at you some noise. region track different country a because you goes timing. inflation Lat U.S. it country. an But a the continue vis-a-vis to times, CPI cleaner as look because quarter-to-quarter by it especially little variances to basis bit closely. we in like that's like look country especially on or when Sanjiv that at a pricing they at on of you're the annualized a could Now something said, at of balance we bit look levels Europe. timing, sequential the look at Am,

Operator

Our next JPMorgan. question Jeff with comes from Zekauskas

Jeffrey Zekauskas

good? plan? that you Have Are you much $X I does still think been a a I you at have billion opportunity SMRs. Linde, and blue out time? years or how over to Have to the produce couple about to invested? -- $X And according change of hydrogen, number decarbonize they more change talked investment look direction or to stretched things billion ATRs ago, think to was

Sanjiv Lamba

Thank you, Jeff.

road you had we and that, laid decarbonization yes, levers. if our strategy said map, were of So And we X part out there as will.

$XX XX years. in The We've said over this -- the was is investment past. billion first lever and out of a

cetera. billion bulk for our export for new and in vector at our pillar. to customers some hydrogen operations decarbonizing just the a be point deployment And enabling which of as the is own that would to of was time. lever act decarbonize, We that an First was our $X our estimate with said pillar opportunities third second energy purposes, et

is you at the what to which moment, pillar, referring first of happening. which is at -- our where a is lot the work are moment The

to know, large us currently They we between fleet do serves for we very steam the hydrogen customers understand Coast. best that have of that for Gulf studies decarbonization. of to SMRs that the in XXX miles large you reformers or As retail stages network requirements. the of SMRs connects of have and part various pipeline we U.S. in opportunity a are FEED that XX those for are to XX And

On to as those post-combustion ways XXXX for concerned. years. can capture. at that are over do think be is developed that. the see And point ongoing that. is speaking, in FEED FEED The that We do are probably we SMRs, business billion we with time. do as us our set that's the view different next the cases we studies Whether syngas a feed this My far line $X there I the will can actually technically expect They are We in few capture. more those conclusion with study more, will track targets ourselves. technical tell to I get to on as and or progress

we'll wait think I But to ballpark. right come you, about say the to in order of through. the So for FEED magnitude, that's I'd

Jeffrey Zekauskas

But volume your merchant packaged, what into quickly, the the year-over-year volumes were for on-site would the like break quarter? changes, in if I'm United up they and to States But realize if sorry, look second and in you then And Okay. it Americas. I compare flat. the -- had you that had to

Sanjiv Lamba

in So little what about Jeff, a why don't bit we're I just Americas. talk seeing

you into give a that lead will because is are. this it of think where good flavor the volumes think I I a

I think well. question as hopefully your answer

I'll has reflecting So softer that there see we are in by to referenced market industrial But I resilient, start last that surprised the obviously, the we In sluggishness that it mean being sluggish, just seeing incredibly market. that been is PMI, most growth right? off the now itself, activity saying cetera. were the is U.S. people. it more we starting marketplace. the demand in everyone's et the And coding quarter

So Hydrogen the volumes an for strong rest exception is remain to at them the expect hydrogen levels, that to exception I that, year. are notable and to demand. of high a very

what's comes of space. -- think which happening were the elements reflection quering in chemicals a one out that you is and is of that the of of I piece, we've again, energy the on-site So volumes seen. that key those HyCO again, And

out The carefully packaged other is of hard watch business. U.S. that I indicator the the goods

single in for this I the you're happening softer what saw and in indicator hard expect the activity. is leading is seeing a of couple goods during environment, I next of Clear You quarter, decline quarters goods say indicator that industrial manufacturing year-over-year sales to Again, digits. least. we low consider heard continue manufacturing that me before, at hard

Now hard goods though. were sequentially flat,

sequential out volumes those that merchant on-site that of X, think we goods you play between an year-on-year were happening I I were say as packaged. seeing seeing seeing softer far but that hard terms as see are indication fair mean, what's gives wasn't movements around where that a you you business. and worsening, we So what in packaged that's our Again, between it concerned. I'd view were of

Operator

Our next with Cunningham Patrick comes from Citigroup. question

Unknown Analyst

an Patrick. Deflationary This Can And Zang issue. for you the you're has continued trended? region? be how cost to conditions pricing on is about in China in Eric the talk actions taking

Sanjiv Lamba

Sure.

been we So cost reminding stable who I'll you position serve Tier quite X China, by have begin best some just of customers in the fields that through and in of this have tend kind downturn. to the their

ongoing say point, probably high-quality when you, back, about could the mature business about say, talked specifically were a isn't productivity as actions and first go and to starting in XX and business. now as -- is about And a I both as very, actually around well. cost treating very around in enhancing performance China just it's fact China If activities cost actions, fixed growth customer months you ramping cost that's we think months. and for XX new. management concerns business I'd I talk the that a around So been the on that base for of up stability we important having China about It I'll

acting We now. on not it are

and completed. this cost base. leveraging are and good give that we we action AI already is one obviously feel so managing in more where we China. the Much can example. of are good how China, and undertaking stand I I'll cost base forth productivity running you on reset simple examples do that. about and so using There to been programs of in very with are the We we has opportunity this been the pretty an have as

and have so to both the go most record them. China, both the recent X in to -- take in walk companies come that and requirements readings following regulatory safety can and for recruit authorities operations China, had So to and audit them officers instance, around X plant between

of done that. companies have Now most the

how actions we've we just that. one you example As and in out expect Smart many where Clear at create significantly. doing a And obviously digital base you I'd a don't called increase about itself also long plants accomplish that cost result to give we're solution moment, are would and best using of the Linde the hard of Plants -- the combination of benefits, rolling program of that. of drones terms our gauges broadly are this taken, a quite to then much recorded. the that your and China, plant pressure in applied productivity points addressing you and a reading of across to being that are cost That's used employee which but as automatically smart That's do sure FTEs of fleet or your within robots where are they make project, both productivity that technology,

China is pricing, in deflation. On

team keep currently kind So to continue pricing pricing to and we'd to say the want ourselves that at to get X% is of move are like see -- where pricing. we that's happen, try the to that to mark pushing elements if There X we up.

pricing China industrial long an strong, there. that be lower had rare particular, in being on the coming we'll package on merchant to demand and see is, has But are has partly has momentum that the partly in over and pressure seeing the by segment about seeing however, because and from team that, positive beyond move pricing which and impact on the industrial obviously we are electronics to good got continues there, action from China, and driven feel of helium On continue pricing, It helium and we made into Russia pricing I there. movement forward. lower gases, by offset helium

Operator

Our Partners. McCarthy comes with from Kevin Vertical next Research question

Kevin McCarthy

the a about Matt. some talked prepared for the of the in year. project A capital in half your quarter. you of prepays bit And deployment I on think accelerated the remarks, back repurchases pace harvest of in few questions a potential

you potential deal So likely guardrails quarters for of that path could contrast and bolt-on would your you in foresee with the A activity glide within that of repurchases comment on rating? coming single the maybe

Matthew White

Sure, Kevin.

our To allocation many, of year, know to been rating. things as where and expect that And And now. given the that, flow will of remarks, every fairly an room back a something integral in it's operating stand you the market. obviously, in going our that. back pickup quarters to I in first your we going obvious single the half. back we right that's think And to the see some we But I to it on look cash consistent be the absolutely That's said, capital this they and day our half given were are of nice that consistent. A I which be a repurchases point, years, being significant policy, they just better prepared many stated metrics for repurchase in have timing mentioned, are than plan X do within the forward. generally expect that amount half of part of all the expect, well out in in remain I

definitely the in want we deploy and in saw we'll opportunities we we'll that execute determine accelerate on to inside allocation see quarter. quarter, a stock. we And that And when number last We cash the sometimes based will policy. the capital this then

felt got pricing. execution, we repurchased recently, we good $X.X and So and and accelerate good did billion we we

COVID our plan We forward. did our day market. significant accelerate we we again, day, will what like to will So did in. some times. to we great we it take that But And where the we based will crisis, we overall see or as to during back allocation. advantage on and the and continue during anything opportunities see saw And going come know, the be if patterns that, capital equation part the cash our that the of back in financial of you absolutely change

Kevin McCarthy

And potential? any bolt-on on thought deal

Matthew White

something to M&A, going tuck-ins. we're be For I evaluated mean always that's for

that our North M&A APAC did we in cash continued justified our activity. out maybe America, in business. here on had probably we here It synergies. more see statement mostly These packaged flow some will could great gas are do They You be that tuck-ins. recent are

seeing very the have decap criteria And opportunities, I more threshold. for low same. are they but a that's So that and our think investment we between them remains something decaps, risk

themselves to absolutely So business M&A our we'll our that's Tier back allocation and if invest is part but capital see a criteria of present in investment customers. with aspect consistent the opportunities our policy that. with X of

Operator

from We will now take Roberts our final Mizuho. question John with

John Ezekiel Roberts

to high I Matt, Does do productivity are down? plateauing -- markets? return as think and when maybe driven the it in? in, the transition talked energy start you plateaus here, markets cyclicals it do energy start to high come investments recover think come when back to and it starts come Or even earnings come by transition investments as it stay or capital, a And invested little the you've then drift before higher long cyclical the about here. in consumer-based even on

Matthew White

John. Yes. Sure,

point, you our your look to next return our competitor. capital, leading. on when the at more case the industry think Xx on I probably return look, both we have In to and of capital, margins or

more maintain margins and want to we the room. or growing So in continue quality. high grow growing as have is potentially I mentioned, means while margins, we of we which improve view way Obviously, quality, to that and the grow some in

view have segment. in each room eventually them converging. We We

opportunity advantage of. that . will to so And take continue

with denominator the comments policy Kevin, earlier change. metric won't the numerator allocation just consistent. with a of On NOPAT ROC, base. capital capital a my very is It's absolutely you're a our of and right. Per I mean That

the I equation. about of feel quite is And range which the that so good long denominator,

And you're then see just to going Obviously, our On in a the your it's that lower, little we accelerations higher more little be be function the going growth rate. it numerator, to number. stagnant. may of is a if grow, a growth

So good levels. XX Time or XX given We our we just rate. maintain we it to these increase if increase another bps will growth tell did feel them. here

But And levels. at after be to accordingly. it's is criteria, does investment We make That's means function our cash premium rack clear, M&A, unlevered right? that as So But drive look decisions to investments, no our driven on ROC at whether and am by IRR how adjusting we'll tax. see. happy these incremental risk a projects. more it's whether getting we I a

we important a any continue our investor in affect a our something capacity, So view that growth not key but accounting going on and backward-looking as is -- it's metric and industry we're us returns return on. to to for it this it's for the lead because will metric, owners, capital

Operator

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

Juan Pelaez

thanks. Nice Thank you, for Adam, in everyone, today's participating job. call.

free you questions, If feel have safe. any reach further to Stay out.

Operator

and call. that concludes Ladies gentlemen, today's

Thank now disconnect. You you. may

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