Linde Earnings Call Nuggets: Gases Volumes, Organic Growth Rate
On Monday, Linde AG (LIN) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Stephan Kippe – Commerzbank: Two questions, if I may. First of all, with regards to Lincare, you provided us with the top line figure for Lincare in the Q3 contribution. Could you give us some – any sort of indication as to where the operating margins for the Lincare operations have been maybe compared to Q3 last year or Q2 of this year? Second question in general, on a constant asset basis, how would you describe the gases volumes have developed in a year-over-year comparison and also compared to the previous quarter?
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Georg Denoke – Member of the Executive Board and CFO: I think as pointed out, we have EUR231 million contribution in sales and from an perspective of profit, this is fully in line I think with the previous quarter. This is the indication we can give to you. On a volume perspective, I think from an perspective of we have been active, as we pointed out. We have seen from an European perspective Southern Europe rather weak and Eastern Europe, Middle East in a strong economic environmental also Nordic is holding up better than Central Europe. From an perspective of Americas we have seen really the shutdown, the unplanned shutdown in Venezuela and (Ruhr) Brazil in (indiscernible) North America in strong and bulk as I pointed out, and in Asia we have still China being the frontrunner from an prospective year-on-year growth, and of course we were negatively affected by the plant shutdown in Singapore which hits us and this is in a way the combination Australia was a little bit softer if we compare quarter three this year and quarter three last year. The reason is also here honesty the warmer winter in Australia compared to last year, so the LPG business was in the Southern Hemisphere overall a little bit softer, so that is from perspective of the volume development I think which we want to share with you at that point in time.
Organic Growth Rate
Evgenia Molotova – Citi Investment Research: Several questions if I may. Today there were word of discussions about the actual organic growth rate for the nine months based on the footnote in you Slide 6 that you include EUR113 million of changes in consolidation in the organic growth rate, so I just wanted to clarify. As far as I understand from the notes on Page 29 of the report you include EUR86 million of Air Products into this number, and the rest; is it site takeovers or is it also M&A? The second question is actually about the start-up this quarter. If you could tell us how many start-up did you have and which of them was takeovers? And the last one is on price and volume development in bulk and cylinders in Western Europe; if you could – in Q3 if you could guide on that would be great?
Georg Denoke – Member of the Executive Board and CFO: Very detailed questions as we are used to it from you. So, when we look into the volume development – I start with the last one – when I look into the volume development of Continental Europe, then we have to understand that the overall perspective is positive on the volume side, also, of course, supported by our new merchant LNG business overall in Scandinavia, for example, and from a pricing perspective it’s rather neutral in (RCN), and I was pointing out the effects by Continental Northern Europe; so better north and weaker south, central more neutral, and when we include either EMEA, then you have Eastern Europe remaining stronger and the Middle East, of course, more positive. More visible, of course, not in the top line because our big scheme for enhanced gas recovery, which is moving aggressively up is of course not top line visible, but that’s as a contribution of the share (indiscernible) net income in our EBITDA number. In U.K., I was not mentioning that U.K. pricing here was positive, and also in positive volume development. When we then move to your question of comparison of the quarter-on-quarter, year-on-year comparison, I think we pointed out what the Lincare effect is – I made clear in my speech what the AP effect is from an continental European perspective if I cast that out, right. The year-on-year effect, quarter-on-quarter is roughly 1.5%, 1.4%. The year-to-date effect is without AP 2.3% and the quarter-on-quarter perspective is positive with roughly 3.5%, including AP would be 3.9%. The others are de-captivations. Here when you refer to the number of $130 million in change in consolidation. Some of that is in the (backup) of the Page 29, so these acquisitions are small acquisitions like the acquisition mainly in Korea, these were small acquisitions.
Evgenia Molotova – Citi Investment Research: But this de-captivations is useful…
Georg Denoke – Member of the Executive Board and CFO: These are acquisitions. De-captivations are not included.
Evgenia Molotova – Citi Investment Research: The number of startups this quarter?
Georg Denoke – Member of the Executive Board and CFO: I think we had around four start-ups this quarter. But we had the negative one-time effect which I was referring to. I think this is, of course, especially from a tonnage perspective to be considered in your evaluation.