Linde Plc Q1 FY2026 earnings call

• The Lindy team delivered solid quarter with EPS of $4.33 growing 10%, operating margins 30%, return on capital 24%. - By end market: Healthcare resilient but US home care flat due to policy; food and beverage grew mid to high single digits; electronics driven by AI chip investments; chemicals and energy led by Americas; metals and mining growth from Americas; manufacturing half from US aerospace. - Helium in oversupply but recent shortages, well positioned with contracted business focusing on meeting commitments and securing long-term agreements. - Sales of $8.8B up 8% yoy, underlying sales up 3% from pricing and volumes. Operating profit $2.6B up 8% yoy. EPS $4.33 up 10%. Operating cash flow $2.2B, free cash flow $900M. - Raised annual dividend by 7%, repurchased $800M stock, reinvested ~$1.5B into business.

Healthcare: 16% of global sales, grew 1% year over year. Food and beverage: 9% of sales, grew 5% from broad-based strength. Electronics: increased 10%, primarily driven by investments in advanced chips for AI. Chemicals and energy: 22% of sales, increased 3%. Metals and mining: grew 3%. Manufacturing: grew 5%, half from aerospace activity in the US. Sales of $8.8 billion were up 8% year-over-year and flat sequentially. Operating profit of $2.6 billion increased 8% year-over-year and resulted in a margin of 30%. EPS of $4.33 was 10% over prior year.

• Second quarter EPS range $4.40 - $4.50, 8% - 10% growth, includes 1% currency benefit. - Full year updated range $17.60 - $17.90, 7% - 9% growth, includes 1% currency tailwind, assumes no economic improvement at midpoint. - Left top at $17.90 as early to signal increased optimism, but raised bottom due to increased confidence in business resiliency.

• Geopolitical volatility affecting industrial activity in EMEA, with onsite customers shifting production. - Helium supply chain constraints, though well positioned but need to meet existing customer commitments first. - Uncertainty around longer-term effects of Middle East conflict on industrial activity. - Seasonality impacts on volumes in certain regions like APAC.

Q: On margins, why was Europe flat, Asia down?

A: Europe has weaker industrial environment, no volume recovery; Asia had half sales growth from equipment sale with lower margin, and Q1 seasonality.

Q: On commercial space reaching 5% of sales, capacity and partnerships?

A: In concert with customers, working with launch providers, starting with longer logistics halls and moving to closer contracts as launch cadence increases.

Q: On helium supply shock vs Russian one?

A: Helium business 85 - 90% contracted, Q1 sales flat with pricing decline and volume increase, expecting pricing to rise and more long-term agreements.

Q: On Woodside project slip?

A: Nitrogen startup expected, ATR and TNS slipped to Q1 next year due to construction delays.

Q: On volume landscape across regions?

A: Americas improving with product dislocation, EMEA with chemicals weakness, APAC relatively neutral; US PMI positive affecting hard goods and package gases.

Q: On European energy prices and pricing?

A: Volatile energy prices lead to surcharges, sustained increase needed for price incorporation.

Q: On industrial demand improvement?

A: Stability helps, service economy resilience, IAA and protectionist policies in Americas help, EMEA needs catalysts.

Q: On chemicals and energy segment run rate?

A: Strength in Americas remains, comps get easier.

Q: On other income and FX?

A: Other income 63M vs 26M yoy from a sale; FX 5% impact on sales, EPS, etc.

Q: On EMEA volume and guidance?

A: Guidance assumes no economic improvement, EMEA onsite chemicals and energy declined in Q1.

Q: On volume cyclical upswing and helium volume opportunity?

A: Guarded on global recovery, helium has incremental volume opportunity through long-term contracts.

Q: On project delays and contracts?

A: No concerns on backlog projects; contracts have force majeure language, economic not a force majeure.

Q: On FX contribution and EPS goal?

A: FX 1% assumed in guidance, spots better since then, need management actions and capital allocation to reach double-digit EPS growth