SOURCE: Linde AG

October 30, 2007 06:40 ET

January - September 2007: The Linde Group continues dynamic growth

MÜNCHEN, GERMANY--(Marketwire - October 30, 2007) -



Double-digit increase in sales and earnings predicted for 2007

  * 3rd quarter: sales up 18.6 percent, operating profit * up to 20.7
    percent
  * January to September: Sales up 14.7 percent to 8.958 billion euro
  * January to September: Operating profit* up 16.7 percent to 1.770
    billion euro
  * 2007 outlook refined: sales of more than 12 billion euro and
    operating profit of 2.3 - 2.4 billion euro expected

Munich, 30 October 2007 - The technology group The Linde Group achieved double-digit increases in its sales and operating profit for the nine months to 30 September 2007, continuing its positive performance from the first six months of the year. "More than a year after our acquisition of BOC, I am happy to say that our position is robust and weatherproof," said Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. "The Group reorganisation has been successful and we are much stronger now as we approach the tasks ahead." Linde has given a more precise forecast for the whole year 2007: "At a Group level, we are expecting to achieve sales of more than 12 billion euro and operating profit of 2.3 to 2.4 billion euro," explained Reitzle. These figures correspond to a double-digit growth rate in sales and earnings. Linde's medium-term objective remains the achievement of operating earnings of over 3 billion euro in the 2010 financial year.

To ensure comparability of the Group's business performance, the prior year figures for sales and operating profit have been adjusted to take account of the new Group structure. The prior year figures include the remaining core activities of BOC, but exclude KION, the forklift business sold in 2006, the BOC Edwards components business and the other companies sold following the BOC acquisitions.

On this basis, group sales were 18.6 percent up in the third quarter when compared with the prior year period to 3.070 billion euro (2006: 2.588 billion euro). Operating profit for July to September rose to 612 million euro (2006: 507 million euro). This represents an increase of 20.7 percent. On the nine month basis, Group sales to 30 September 2007 increased by 14.7 percent to 8.958 billion euro (2006: 7.811 billion euro). Group operating profit rose during the period to 1.770 billion euro (2006: 1.517 billion euro). This represents an increase of 16.7 percent.

Earnings before taxes on income (EBT) rose significantly from 554 million euro to 1.109 billion euro. The figure was affected by two non-recurring items. On the one hand, EBT was reduced by impairment losses of 335 million euro recognised in the course of the purchase price allocation of the BOC acquisition. On the other hand, the profit on the sale of parts of the business of 574 million euro had a positive impact.

Earnings after tax at 30 September 2007 were 764 million euro, significantly higher than the prior year figure of 451 million euro. There was a corresponding rise in earnings per share to 4.48 euro (2006: 3.38 euro). After adjusting for non-recurring items, earnings per share were 3.55 euro (2006: 3.50 euro).

Gases Division

In a global market environment which continues to be robust, sales in the Gases Division in the first nine months of 2007 increased by 9.1 percent to 6.850 billion euro (2006: 6.279 billion euro). Operating profit rose 12.0 percent to 1.707 billion euro (2006: 1.524 billion euro). This represents an operating margin of 24.9 percent (2006: 24.3 percent). All the regions were successful in contributing to the positive business performance of the Gases Division.

In Europe, sales increased in the first nine months of 2007 by 7.8 percent to 3.483 billion euro (2006: 3.232 billion euro). Again, it was the Eastern European market which was the most dynamic, but the good economic situation in Western and Central Europe and in Scandinavia ensured that there was high demand for industrial gases.

In North America, the Gases Division, which felt the impact of unfavourable exchange rate movements, increased sales by 2.6 percent to 1.493 billion euro (2006: 1.455 billion euro). After adjusting for exchange rate movements, sales growth in North America was 6.9 percent.

In South America, sales rose 15.0 percent to 375 million euro, compared with the prior year figure of 326 million euro. The adjusted figure for sales growth was 17.0 percent.

In Africa, the Gases Division increased its sales by 2.6 percent to 391 million euro (2006: 381 million euro). Unfavourable exchange rate movements had an adverse impact here as well. After adjustment, the increase in sales was 16.6 percent.

In the Asia/Pacific growth market, Linde achieved a significant increase in gases sales in the nine months to 30 September 2007 from 963 million euro to 1.202 billion euro. This represents a rise in sales of 24.8 percent, which means that the Asia/Pacific region once again saw the fastest rate of sales growth.

The Gases Division also achieved significant increases in sales in the individual product segments. On a comparable basis - after adjusting for exchange rate movements, changes in the price of natural gas and changes in the companies included in the consolidation - sales in the cylinder gas business rose 7.7 percent to 2.714 billion euro (2006: 2.519 billion euro), while bulk business sales increased by 6.1 percent to 2.103 billion euro (2006: 1.982 billion euro). The on-site segment, where Linde supplies industrial gases to customers from plants situated directly on the user's site, saw a 9.5 percent increase in sales to 1.567 billion euro (2006: 1.431 billion euro), while the Healthcare or medical gases business achieved sales growth of 8.9 percent to 734 million euro (2006: 674 million euro).

Gases Division - Outlook

Linde is expecting to achieve average growth of around 7 percent per annum in the global gases industry over the coming years. The medium-term objective remains the same. Linde wants its Gases Division to grow at a faster rate than the market and to increase earnings at a faster rate than sales revenue.

Engineering Division

During the current financial year, the Engineering Division has continued on the same growth path as in the past few years, achieving an increase in sales at the end of September 2007 of 51.5 percent to 1.835 billion euro (2006: 1.211 billion euro). Operating profit rose 50.9 percent to 160 million euro, compared with the prior year figure of 106 million euro.

Order intake in the Engineering Division of 2.248 billion euro almost reached the same exceptional high level as in the prior year (2.563 billion euro). Order backlog at 30 September 2007 stood at 4.639 billion euro (31 December 2006: 4.529 billion euro). This dynamic business performance was boosted by continuing high demand in the four major product segments: olefin plants, natural gas plants, air separation plants, and hydrogen and synthesis gas plants.

Engineering Division - Outlook

The Engineering Division has a very high level of order backlog and expects these orders to continue to be fulfilled on schedule. Against this background, Linde expects significant increases in sales and earnings in its engineering business. Linde is aiming to achieve sales in the Engineering Division for the whole year 2007 of at least 2.4 billion euro.

N.B.: To coincide with the publication of our quarterly report, a teleconference for analysts will take place today at 4pm (German time) with Georg Denoke, CFO and Member of the Executive Board of Linde AG, in English. Journalists will have the opportunity to listen to the conference live by dialling +49 (0)69 589 99 0509. Please tell the operator your name and the name of your company.

Following the teleconference, you will be able to hear a recording of the event by calling +49 (0)30 726 167 224. Please give the following reference number: 770238.


The Linde Group is a world-leading industrial gases, medical gases and engineering company with around 50,000 employees in more than 70 countries worldwide. Following the acquisition of The BOC Group plc, the company has gases and engineering sales of around 12 billion euro per annum. The strategy of The Linde Group is geared towards earnings-based growth and focuses on the expansion of its international business with forward-looking products and services. For more information, please see The Linde Group online at http://www.linde.com

Further information:

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*EBITDA before non-recurring items, including share of net income from associates and joint ventures





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