Linde plc (LIN) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 27, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, good day, and thank you for standing by. Welcome to the Linde Second Quarter 2023 Earnings Teleconference and Webcast. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session.

And I would now like to hand the conference over to Mr. Juan Pelaez, Head of Investor Relations. Please go ahead, sir.

Juan Pelaez

Thank you, Abbie. Good morning, everyone, and thank you for attending our 2023 second quarter earnings call and webcast. I am Pelaez, Head of Investor Relations, and I'm joined this morning by Sanjiv Lamba, Chief Executive Officer; and Matt White, Chief Financial Officer. Today's presentation materials are available on our website at linde.com in the Investors section. Please read the forward-looking statement disclosure on Page 2 of the slides and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are in the appendix to this presentation. Sanjiv will provide some opening remarks, and then Matt will give an update on Linde's second quarter financial performance and outlook, after which we will wrap up with Q&A.

Let me now turn the call over to Sanjiv.

Sanjiv Lamba

Thank you, Juan, and a very good morning, everyone. The Linde team once again delivered strong results despite the challenging environment. For the second quarter, we grew EPS, ex-FX by 16%, expanded margins 440 basis points and increased return on capital to 24.9%. These results don't just happen on their own. They require a strong execution culture and operating rhythm, which ensures that all 66,000 employees are aligned towards creating shareholder value. I'm proud of how we've demonstrated this resilience quarter after quarter, regardless of the economy.

To this end, we are seeing some economies stag nato [ph] start to soften as evidenced by recent data. Now I'm not going to try and predict what the future is going to do because no one really knows. But I can tell you with some confidence that Linde will continue to manage what we can control and deliver on our commitments, which is reflected in our guidance for the year.

For example, we are managing inflation by contractually passing through energy cost variances while securing price increases which are aligned with local market trends. This is a key part of our contractual structure and operating discipline that we've consistently demonstrated for decades. On top of this, we continuously optimize costs through robust productivity initiatives. Ultimately, it's the spread between price and cost, which adds compound value.