Linde : Full Year Report (2024 directors report and financial statement
LIN
LINDE PLC
DIRECTORS' REPORT AND FINANCIAL STATEMENTS FINANCIAL YEAR ENDED DECEMBER 31, 2024
TABLE OF CONTENTS
Page
Report of Independent Auditors 30
Consolidated Financial Statements 37
Consolidated Statement of Profit and Loss 38
Consolidated Statement of Comprehensive Income 39
Consolidated Statement of Financial Position 40
Consolidated Statement of Changes in Equity 42
Consolidated Statement of Cash Flows 43
Notes to the Consolidated Financial Statements 44
Company Financial Statements 91
‌Directors' Report
PRINCIPAL ACTIVITIES
Linde plc is a public limited company formed under the laws of Ireland with its principal offices in the United Kingdom and United States. Linde is the largest industrial gas company worldwide and is a major technological innovator in the industrial gases industry. Its primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, and rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, and acetylene, etc.). The company also designs and builds equipment that produces industrial gases and offers customers a wide range of gas production and processing services such as olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants and other types of plants.
Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics.
The historical consolidated financial statements of Linde plc for the periods prior to the merger as described in Note 1 to the Consolidated Financial Statements are considered to be the historical financial statements of the Group and that is reflected in the comparative and current year financial information presented in this Directors' report.
Atmospheric gases are the highest volume products produced by Linde. Using ambient air as feedstock, Linde produces oxygen, nitrogen and argon through several air separation processes of which cryogenic air separation is the most prevalent. Linde is the market leader in the field of non-cryogenic air separation technologies for the production of industrial gases. As part of this process Linde also produces rare gases, such as krypton, neon, and xenon. As a pioneer and leader in industrial gases, Linde is continuously developing a wide range of proprietary and patented applications and technologies to produce, store, distribute and increase usage of its gases. These technologies open important new markets and provide customers with opportunities to reduce costs, by increasing their operational efficiencies, including vacuum pressure swing adsorption ("VPSA") and membrane separation technology to produce gaseous oxygen and nitrogen on-site.
Process gases, including hydrogen, helium, carbon dioxide, carbon monoxide, specialty gases and acetylene are produced by other production methods.
Hydrogen is produced from a range of different feedstocks using a wide portfolio of technologies. Today, carbon intensity is used to designate and differentiate between the production processes and the respective feedstocks used to produce the molecule. The majority of conventional hydrogen currently produced by Linde is derived from natural gas or methane, using steam methane reformation (SMR) or auto-thermal reforming (ATR) technology. Linde has a range of technologies to produce low-carbon hydrogen from fossil feedstocks, or renewable hydrogen from renewable energy (non-fossil feedstock). Both products are considered sources of clean energy. Low-carbon (blue) hydrogen is produced primarily from methane, by capturing carbon emissions from a hydrogen production plant and sequestering them subsurface for the long term. Renewable (green) hydrogen is produced by electrolysis using renewable energy and water as feedstock. Other sources of low-carbon hydrogen are existing chemical and petrochemical processes, out of which Linde recovers hydrogen for subsequent treatment and cleaning to achieve ultra-high purity levels.
Carbon monoxide can be produced by either steam methane reforming (SMR) or auto-thermal reforming (ATR) of natural gas or other feedstock such as naphtha, a by-product in the petrochemical industry. Most carbon dioxide comes as an industrial by-product, that is sourced from chemical plants, refineries and other processes or is recovered from natural carbon dioxide sources. Raw carbon dioxide is processed and purified in Linde's plants to produce commercial and food-grade carbon dioxide. Helium is sourced from certain helium-rich natural gas streams in the United States, with additional supplies being acquired from outside the United States. Acetylene is primarily sourced as a chemical by-product, but may also be produced from calcium carbide and water.
There are three basic distribution methods for industrial gases: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. These distribution methods are often integrated, with products from all three supply modes coming from the same plant. The method of supply is generally determined by the lowest cost means of meeting the customer's needs, depending upon factors such as volume requirements, purity, pattern of usage, and the form in which the product is used (as a gas or as a cryogenic liquid).
On-site. Customers that require the largest volumes of product (typically oxygen, nitrogen and hydrogen) and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Linde constructs plants on or adjacent to these customers' sites and supplies the product directly to customers by pipeline. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and containing minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Air separation technologies also allow on-site delivery to customers with smaller volume requirements.
Merchant. The merchant business is generally associated with distributable liquid oxygen, nitrogen, argon, hydrogen, helium and carbon dioxide. The deliveries generally are made from Linde's plants by tanker trucks to storage containers at the customer's site which are usually owned and maintained by Linde and leased to the customer. Due to distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three to seven-year requirement contracts.
Packaged Gases. Customers requiring small volumes are supplied products in metal containers called cylinders, under medium to high pressure. Packaged gases include atmospheric gases, hydrogen, helium, carbon dioxide, acetylene and related products. Linde also produces and distributes in cylinders a wide range of specialty gases and mixtures. Cylinders may be delivered to the customer's site or picked up by the customer at a packaging facility or retail store. Packaged gases are generally sold under one to three-year supply contracts and through purchase orders.
Linde's Engineering business has a global presence, with its focus on market segments such as air separation, hydrogen, synthesis, olefin and natural gas plants. The company utilizes its extensive process engineering expertise in the planning, design and construction of highly efficient plants for the production and processing of gases. With its state-of-the-art sustainable technologies Engineering also helps customers avoid, capture and utilize carbon dioxide emissions. Its technology portfolio covers the entire value chain for production, liquefaction, storage, distribution and application of hydrogen which supports the transition to clean energy. Its digital services and solutions increase plant efficiency and performance.
Linde's plants are used in a wide variety of fields: in the petrochemical and chemical industries, in refineries and fertilizer plants, to recover air gases, to produce synthesis gases, to treat natural gas and to produce noble gases. The Engineering business either supplies plant components directly to the customer or to the industrial gas business of Linde which operates the plants under a long-term gases supply contract.
BUSINESS REVIEW
CONSOLIDATED RESULTS OF OPERATIONS
The following table provides summary results of operations of Linde plc for 2024 and 2023:
(Millions of dollars, except per share data)
Year Ended December 31,
2024
2023
Variance
Sales
$ 33,005
$ 32,854
$ 151
- %
Cost of sales (includes depreciation)
20,260
20,579
(319)
(2)%
Marketing and selling expenses, Administrative expenses and Research and development costs (includes depreciation and amortization)
4,295
4,210
85
2 %
Other operating (income) expense - net
(185)
41
(226)
N/A
Operating profit
$ 8,635
$ 8,024
$ 611
8 %
Operating Margin
26.2 %
24.4 %
Interest expense - net
256
200
56
28 %
Net pension and OPEB cost (benefit), excluding service cost
(190)
(164)
(26)
16 %
Share of profit and loss from associates and joint ventures (at equity)
(170)
(167)
(3)
2 %
Income tax expense
2,002
1,814
188
10 %
PROFIT FOR THE YEAR
$ 6,737
$ 6,341
$ 396
6 %
attributable to Linde plc shareholders
$ 6,565
$ 6,199
$ 366
6 %
attributable to noncontrolling interests
$ 172
$ 142
$ 30
21 %
DILUTED EARNINGS PER SHARE - LINDE PLC SHAREHOLDERS
$ 13.62
$ 12.59
$ 1.03
8 %
Results of Operations, 2024 Compared With 2023
Sales were flat for 2024 compared to 2023. Sales grew 2% from higher price attainment. Volumes were flat, as base volume declines were largely offset by new project start-ups. Cost pass-through, representing the contractual billing of energy cost variances primarily to onsite customers, decreased sales by 1%, with minimal impact on operating profit. Currency translation decreased sales by 1%, primarily due to the weakening of the Brazilian real, Chinese yuan, and Korean won against the U.S. dollar.
Cost of sales decreased 2% to $20,260 million in 2024 compared to $20,579 million in 2023 primarily due to lower cost pass-through and productivity gains which more than offset cost inflation. Cost of sales was 61.4% and 62.6% of revenues, respectively, in 2024 and 2023. The decrease as a percentage of revenues was due to higher pricing and lower cost pass-through.
Marketing and selling expenses, Administrative expenses and Research and development costs ("SG&A/R&D") increased $85 million in 2024 to $4,295 million, primarily due to higher costs. SG&A/R&D was 13.0% of revenues in 2024 versus 12.8% of revenues in 2023.
Other operating (income) expense - net in 2024 was a benefit of $185 million versus a charge of $41 million in 2023. 2024 income included a benefit of $41 million related to a settlement with a supplier in the Americas, and $45 million in insurance recoveries, primarily within the Other segment (see Note 5 to the consolidated financial statements).
Operating profit of $8,635 million in 2024 increased $611 million, or 8%, from operating profit of $8,024 million in 2023. The increase was primarily due to higher pricing, and savings from productivity initiatives, which more than offset the adverse impacts of cost inflation, cost reduction program and other charges and currency. A discussion of operating profit by segment is included in the segment discussion that follows.
Interest expense - net in 2024 increased $56 million, or 28%, versus 2023. The increase was driven primarily by higher outstanding borrowings due to net issuances in 2024 and higher interest rates on borrowings (see Note 6 to the consolidated financial statements).
Net pension and OPEB cost (benefit), excluding service cost were benefits of $190 million and $164 million in 2024 and 2023, respectively. The increase was driven primarily by a higher expected return on assets and lower interest cost due to decrease in benefit obligations, partially offset by lower amortization of deferred gains year-over-year (see Note 16 to the consolidated financial statements).
Disclaimer
Linde plc published this content on April 29, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2025 at 17:32 UTC.