SOURCE: Linde AG

May 04, 2007 06:51 ET

January - March 2007: The new Linde Group makes a successful start to the 2007 financial year

MUNICH, GERMANY -- (MARKET WIRE) -- May 4, 2007 --



* Sales up 9.4 percent to 2.860 billion euro

* Operating profit (EBITDA*) up 10.1 percent to 569 million euro

* Forecast for 2007 confirmed: further increase in sales and earnings expected

Wiesbaden/Munich, 4 May 2007 - In the first quarter of 2007, the technology group The Linde Group has achieved significant increases in sales and operating profit and has confirmed its short-term and medium-term forecasts.

"We have successfully completed the reorganisation of the Group and in the new set-up we made a dynamic start to the 2007 financial year" declared Professor Wolfgang Reitzle, Chief Executive Officer of Linde AG. "We are growing at a faster rate than the market and are well on the way to meeting our short-term and medium-term targets in full."

The Linde Group confirms its previous forecast for the full year 2007: Group sales and earnings are once again expected to exceed prior year figures. Linde has set itself a medium-term target of achieving a Group operating profit for the 2010 financial year of more than 3 billion euro. The synergies arising from the BOC acquisition should have a positive impact here.

To ensure comparability of the Group's business performance, the prior year figures have been adjusted to take account of the new Group structure. The prior year figures therefore include BOC, while KION, the forklift truck division sold in 2006, has been eliminated from the figures.

On this basis, Group sales in the three months ending 31 March 2007 rose 9.4 percent to 2.860 billion euro (2006: 2.614 billion euro). The Linde Group also continued to grow its earnings. Operating profit (EBITDA*) in the first quarter rose to 569 million euro (2006: 517 million euro). This represents an increase of 10.1 percent.

*EBITDA before special items, including share of net income from associates and joint ventures Earnings before taxes on income (EBT) rose significantly from 170 million euro to 647 million euro. Two non-recurring items with opposite effects are included in this figure. An additional amortisation of 107 million euro resulting from the purchase price allocation of the BOC acquisition had the effect of reducing EBT, while a profit on the sale of parts of the business of 510 million euro had a positive impact on earnings.

Earnings after tax for the first quarter stood at 458 million euro, which was significantly higher than the prior year figure of 135 million euro. As a result, earnings per share increased to 2.76 euro (2006: 1.12 euro). After adjusting for non-recurring items, the figure for earnings per share was 1.07 euro. It should be noted here that the number of shares outstanding rose by approximately 40 million shares to around 161 million shares as a result of the increase in share capital in July 2006.

All divisions contributed to the good overall business performance of the Group.

Gases Division

In a stable market environment, the Gases Division posted an underlying sales increase of 7.8 percent in the first three months of the current financial year to 2.249 billion euro (2006: 2.153 billion euro). Without taking account of the effects of exchange rate movements, changes in the price of natural gas and changes in the companies included in the consolidation, the global gases business of The Linde Group grew 4.5 percent. EBITDA* increased by 6.5 percent to 556 million euro (2006: 522 million euro). The business trends in all the regions were positive, and especially in the emerging markets the Gases Division was able to achieve disproportionate increases in sales.

In Europe, sales in the first quarter of 2007 rose 9.2 percent to 1.139 billion euro (2006: 1.043 billion euro). Most of the impetus continued to come from Eastern Europe.

In North America, sales rose 1.4 percent to 577 million euro (2006: 569 million euro). The increase was held back by exchange rate movements. After adjusting for the effects of exchange rates, sales in North America increased by 9.9 percent.

*EBITDA before special items, including share of net income from associates and joint ventures

In South America, business grew 8.3 percent to 118 million euro (2006: 109 million euro). Excluding the effects of exchange rate movements, this represents an increase of 16.3 percent.

The Gases Division in Africa, which was adversely affected by exchange rate movements, achieved sales of 120 million euro, similar to the prior year figure of 121 million euro. After adjusting for the effects of exchange rate movements, the increase in sales was 15.9 percent.

In the Asia/Pacific region, sales rose 1.6 percent to 323 million euro (2006: 318 million euro). Here too, adverse exchange rate movements prevented sales from growing at a faster rate. After adjusting for the effects of exchange rate movements, the increase in sales was 7.2 percent.

The Gases Division also performed well in each individual product segment in the first quarter of 2007.

On a comparable basis, i.e. after adjusting for exchange rate movements, changes in the price of natural gas and changes in the companies included in the consolidation, the on-site business achieved a 12.0 percent growth in sales. Bulk sales rose 5.1 percent, while cylinder sales increased by 7.3 percent. On a comparable basis, sales in the Healthcare segment, our medical gases business, rose 10.5 percent.

Gases Division - Outlook

Linde anticipates market growth in the international gases industry of around 7 percent per annum in the next few years. The Gases Division of Linde expects to grow at a faster rate than the market in the medium term and to achieve a disproportionate increase in earnings.

Engineering Division

The Engineering Division has made an excellent start to the new financial year and is continuing on its path of earnings- based growth. Sales in the first quarter increased by 42.7 percent to 498 million euro (2006: 349 million euro). EBITDA rose in the same period by 46.7 percent to 44 million euro (2006: 30 million euro).

The Engineering Division again achieved a significant escalation in order intake, the most important indicator of future business performance, with an increase of 83.0 percent to 968 million euro (2006: 529 million euro). Order backlog reached a new record high of 4.945 billion euro (31.12.2006: 4.529 billion euro). This dynamic business performance was underpinned by a high level of demand in the main product segments: natural gas plants, ethylene plants, hydrogen plants and air separation plants.

Engineering Division - Outlook

Given the high level of orders on hand and assuming the fulfilment of these orders on schedule, Linde continues to expect a significant increase in sales and earnings in the Engineering Division in future.

N.B. To coincide with the publication of our quarterly report, a teleconference for analysts will take place today at 2pm (German time) with Georg Denoke, Chief Financial Officer of Linde AG, in English. Journalists will have the opportunity to listen to the conference live by calling +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: 748832.

The Linde Group is a world-leading industrial gases, medical gases and engineering company with more than 51,000 employees working in around 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:

Press
Uwe Wolfinger
Telephone: +89.35757-1320

Investor Relations
Thomas Eisenlohr
Telephone: +89.35757-1330

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