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Linde achieves record levels in 2010

Increase in sales and operating profit expected
Linde achieves record levels in 2010

Linde achieves record levels in 2010
Ethylene plant built by Linde
At its last meeting, the Supervisory Board of Linde AG approved the financial statements of the holding company and the Group financial statements for the 2010 financial year. At this meeting, it also appointed Sanjiv Lamba (46) as a new member of the Linde AG Executive Board with immediate effect. Mr Lamba, who is based in Singapore, will be responsible in future for the gases business of the Group in Greater China, South and East Asia and in the South Pacific region. He will also assume responsibility for the Asian joint ventures.

Linde achieved in 2010 double-digit growth in both sales and operating profit, surpassing its previous best figures posted in the 2008 financial year. „The global economy has grown faster and more vigorously than might have been expected,“ the CEO continued. „But our good performance is not just due to the recovery of the global economy. It is also the result of us being in a position to seize growth opportunities as they arise. Our gases and engineering businesses have a global presence. What’s more, we have continued to achieve efficiency gains.“

Linde is looking to the future with confidence. “We have set ourselves new medium-term targets,” explained CEO Reitzle. “We will be aiming to achieve Group operating profit of at least EUR 4 bn in the 2014 financial year. Our minimum target for return on capital employed for the same year is 14 %.” This four-year forecast is based on current economic estimates and prevailing exchange rates. “In the 2011 and 2012 financial years, we assume Group sales and Group operating profit (EBITDA before non-recurring items, including share of net income from associates and joint ventures) will show continuous improvement.”
In the 2010 financial year, Group sales rose 14.8 % to EUR 12.868 bn (2009: EUR 11.211 bn). By way of comparison, Linde achieved sales in the 2008 financial year of EUR 12.663 bn. The Group continued to increase its profitability, with Group operating profit growing at a faster rate than sales, up 22.6 % to EUR 2.925 bn (2009: EUR 2.385 bn). Group operating profit in 2008 was EUR 2.555 bn. The Group operating margin in the 2010 financial year increased by 140 basis points to 22.7 % (2009: 21.3 %). Linde was also able to benefit significantly from the positive impact of its High Performance Organisation (HPO) programme which is designed to achieve sustainable process optimisation and efficiency gains.
Engineering Division
In the international large-scale engineering business, a late-cycle sector, the market climate stabilised in the course of 2010. Linde saw a revival in investment activity, especially for small and medium-sized projects, in its four main lines of business (olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants).
The Engineering Division achieved sales in the 2010 financial year of EUR 2.461 bn, a 6.5 % increase on the prior-year figure of EUR 2.311 bn. The successful execution of a number of individual projects meant that operating profit grew at a faster rate than sales, by 29.0 % to EUR 271 m (2009: EUR 210 m). The operating margin rose to 11.0 % (2009: 9.1 %), again significantly exceeding the target figure of 8 %.
Order intake was EUR 2.159 bn at the end of the year (2009: EUR 2.458 bn). When comparing the figures, it should be noted that order intake in 2009 was largely shaped by a small number of major projects. One major contract for the construction of an olefin plant in Abu Dhabi (United Arab Emirates) was alone worth USD 1.075 bn. In 2010, on the other hand, new orders were spread more widely, with numerous contracts for small and medium-sized plants, both from third parties and from the Group’s own Gases Division. Linde has retained its high order backlog. At 31 December 2010, this stood at EUR 3.965 bn (2009: EUR 4.215 bn).
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