Linde GmbH
Linde AG: Linde launches wide-ranging efficiency programme/ 9-month figures in line with expectations
Linde launches wide-ranging efficiency programme/ – Plan to achieve additional cost savings of around EUR 370 m per annum from 2019 – Group revenue of EUR 12.967 bn affected by exchange rate effects – Group operating profit of EUR 3.066 bn, slightly higher than in first nine months of 2015 after adjusting for exchange rate effects – Operating margin continues to improve – 4.7 percent increase in operating cash flow – Group outlook for 2016 confirmed Munich, 28 October 2016 – The Linde Group is launching “LIFT”, a Group-wide efficiency programme, to ensure that it can act more rapidly and more efficiently in the global competitive environment of industrial gases. From this three-year programme together with measures introduced from 2015 onwards, Linde wants to achieve cost savings of around EUR 550 m per annum from 2019. “LIFT” alone should generate cost savings of around EUR 370 m per annum. In 2016 and 2017, one-off restructuring costs relating to this programme totalling around EUR 400 m will be incurred. Dr Wolfgang Büchele, Chief Executive Officer of Linde AG, said “We have conducted a review of the strategic focus and structures of the entire Group across all organisational units. Overall, the company is on the right track. By applying a variety of additional measures, the LIFT programme will enable us to deliver greater efficiency. Our clear vision for Linde is to ensure that we become one of the most profitable suppliers in the industrial gases and engineering business, a preferred partner for customers and that we sustain this over the long term. We will continue to pursue a growth trajectory.” By improving its internal processes and reducing complexity and hierarchies, Linde wants to increase significantly both the speed of its decision-making and its efficiency. Linde will remain committed to its very solid balance sheet structure and its attractive dividend policy. Therefore, as in the past, it intends to continue with its policy of increasing its dividend when compared with the prior year. January to September 2016: Business performance in line with expectations Once again during the reporting period there was a positive trend in cash flow from operating activities. In the first nine months of 2016, it increased by 4.7 percent to EUR 2.503 bn (2015: EUR 2.390 bn). Gases Division: Slight increase in revenue on a comparable basis In the EMEA segment (Europe, Middle East, Africa), the Group generated revenue of EUR 4.272 bn in the first nine months of 2016, which was 5.4 percent below the figure for the first nine months of 2015 of EUR 4.515 bn. On a comparable basis, revenue was slightly below the figure for the prior-year period. Operating profit was EUR 1.358 bn (2015: EUR 1.350 bn). Operating profit includes income from changes to pension plans and profits on the disposal of non-current assets. The operating margin rose to 31.8 percent (2015: 29.9 percent). In the Asia/Pacific segment, Linde generated revenue in the nine months to 30 September 2016 of EUR 3.027 bn, which was 3.4 percent below the figure for the first nine months of 2015 of EUR 3.133 bn. On a comparable basis, revenue increased by 1.1 percent. Operating profit fell by 1.4 percent to EUR 793 m (2015: EUR 804 m), while the operating margin rose to 26.2 percent (2015: 25.7 percent). In this segment, positive trends for all product areas were to be seen in particular in South & East Asia and in China. In the South Pacific, the prevailing weak economic environment in manufacturing and declining investment in the mining industry had an adverse impact on growth. Appropriate structural and organisational countermeasures were implemented as part of the Customer Focus Initiative. These should lead to cost savings and a higher rate of profitability in the region. Further cost reduction measures have already been identified as part of the newly-launched efficiency programme and will be implemented in the coming months. In the Americas segment, revenue fell in the first nine months of 2016 by 0.8 percent to EUR 3.847 bn (2015: EUR 3.878 bn). On a comparable basis, revenue rose by 2.2 percent. Operating profit fell by 3.1 percent to EUR 947 m (2015: EUR 977 m). The operating margin dropped to 24.6 percent (2015: 25.2 percent). In the Healthcare business in North America, price reductions as a result of government tenders came into force at the beginning of 2016, an effect which intensified as expected after 1 July. It is expected that the adverse impact of these price reductions will be countered by the acquisition of the company American HomePatient, Inc., Engineering Division: Increase in order intake Revenue in the Engineering Division fell by 13.1 percent to EUR 1.739 bn (2015: EUR 2.002 bn). Operating profit here also dropped to EUR 146 m (2015: EUR 169 m). The operating margin remained the same at 8.4 percent, which continues to be above the industry average. To coincide with the publication of the interim report, a webcast for analysts will take place today at 2pm German time in English with Dr Wolfgang Büchele, CEO of Linde AG, and Dr Sven Schneider, interim CFO of Linde AG. Journalists will have the opportunity to watch the webcast by following this link: https://event.mescdn.com/linde/results-conference-call-9m-2016 In the 2015 financial year, The Linde Group generated revenue of EUR 17.944 bn, making it one of the leading gases and engineering companies in the world, with approximately 65,000 employees working in more than 100 countries worldwide. The strategy of The Linde Group is geared towards long-term profitable growth and focuses on the expansion of its international business, with forward-looking products and services. Linde acts responsibly towards its shareholders, business partners, employees, society and the environment in every one of its business areas, regions and locations across the globe. The company is committed to technologies and products that unite the goals of customer value and sustainable development. For more information, see The Linde Group online at www.linde.com
Contact: Person making the notification: Dr Frank Herkenhoff, Head of External Communications End of Media Release Issuer: Linde AG Key word(s): Enterprise
2016-10-28 Dissemination of a Press Release, transmitted by DGAP – a service of EQS Group AG. |
Language: | English | |
Company: | Linde AG | |
Klosterhofstraße 1 | ||
80331 München | ||
Germany | ||
Phone: | +49.89.35757-01 | |
Fax: | +49.89.35757-1075 | |
E-mail: | frank.herkenhoff@linde.com | |
Internet: | www.linde.de | |
ISIN: | DE0006483001 | |
WKN: | 648300 | |
Indices: | DAX | |
Listed: | Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Munich, Stuttgart; Regulated Unofficial Market in Hanover, Tradegate Exchange; SIX | |
End of News | DGAP Media |