Linde plc (NASDAQ:LIN) Q2 2024 Earnings Conference Call August 2, 2024 9:00 AM ET

Company Participants

Juan Pelaez - Head of Investor Relations
Sanjiv Lamba - Chief Executive Officer
Matt White - Chief Financial Officer

Conference Call Participants

Michael Leithead - Barclays
David Begleiter - Deutsche Bank
Duffy Fischer - Goldman Sachs
Peter Clark - Bernstein
Vincent Andrews - Morgan Stanley
Laurent Favre - BNP
Steve Byrne - Bank of America
Mike Sison - Wells Fargo
Josh Spector - UBS
Jeff Zekauskas - JPMorgan
Eric Zhang - Citigroup
Kevin McCarthy - Vertical Research Partners
John Roberts - Mizuho

Operator

Good day and thank you for standing by and welcome to the Linde Second Quarter 2024 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. And after the speakers presentation there will be a question-and-answer session.

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

Juan Pelaez

Adam, thank you. Good morning, everyone and thanks for attending our 2024 second quarter earnings call and webcast. I'm Juan 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 of 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

Thanks, Juan and a very good morning, everyone. Linde employees once again delivered high-quality growth despite the stagnant trends of global industrial activity. Second quarter EPS of $3.85, operating margins of 29.3% and return on capital of 25.7% all reached new highs, driven by the unwavering efforts of our 66,000 employees who actively manage what we can control.

Turning to volume trends; you'll notice we were flat year-on-year. Last quarter, we described potential challenges in the industrial macro. And for the most part, it has played out as expected. This is why we initiated the self-help actions which enable us to create shareholder value in any environment. That being said, the current quarter experienced a 3% sequential volume growth. And while some of this relates to seasonality, certain regions had organic volume improvements. While this is a positive sign, we are still not assuming any meaningful economic recovery in the guidance. Some may view this as overly cautious. But given the uncertain environment, I believe it's prudent to take this approach. As you know, when industrial activity recovers, our network density will enable us to supply that additional volume to our existing and new customers. Until then, we will continue with disciplined pricing and proactive actions to ensure earnings growth in this environment.