Linde plc today reported fourth-quarter 2021 income from continuing operations of $1,024 million and diluted earnings per share of $1.98, up 33% and 37% respectively. Excluding Linde AG purchase accounting impacts and other charges, adjusted income from continuing operations was $1,431 million, up 18% versus prior year and 1% sequentially. Adjusted earnings per share was $2.77, 20% above prior year and 1% higher sequentially.

 

Linde's sales for the fourth quarter were $8,298 million, 14% above prior year and 8% sequentially. Compared to prior year, underlying sales increased 9% from 3% price attainment and 6% higher volumes, mostly from the electronics, chemicals and energy end markets. Sequentially, underlying sales increased 2%, led by higher price across all geographic segments.

 

Fourth-quarter operating profit was $1,337 million. Adjusted operating profit of $1,841 million was up 14% versus prior year led by higher price, strong volumes and continued productivity initiatives across all segments. Excluding the effects of cost pass-through, adjusted operating margins expanded 120 basis points versus prior year.

 

Fourth-quarter operating cash flow of $3,233 million increased 33% versus prior year and 26% sequentially. After capital expenditures of $839 million, free cash flow was $2,394 million, up 70% versus prior year. During the quarter, the company returned $1,891 million to shareholders through dividends and stock repurchases, net of issuances.

 

For full-year 2021, sales were $30.8 billion, 13% above 2020. Compared to prior year, underlying sales increased 11% from 3% price attainment and 8% higher volumes, mostly from the electronics, chemicals and energy end markets. Operating profit was $5.0 billion and adjusted operating profit was $7.2 billion, 24% above prior year. Operating profit margin was 23.3% of sales, 200 basis points higher versus 2020, or 270 basis points higher when excluding the effects of cost pass-through. Diluted earnings per share were $7.32 and adjusted diluted earnings per share were $10.69, up 30% versus prior year.

 

In 2021, Linde generated strong operating cash flow of $9.7 billion, up 31% versus prior year. The company invested $3.1 billion in capital expenditures and paid dividends of $2.2 billion. In addition, Linde repurchased $4.6 billion of stock, net of issuances.

 

Commenting on the financial results and business outlook, Chief Executive Officer Steve Angel said, "2021 was another successful year for the company thanks to the extraordinary work of our employees worldwide. The Linde team delivered another quarter of record financial results by growing EPS 20%, operating cash flow 33%, and increasing ROC to 17.7% - all while positioning the company for future growth with a contractually secured project backlog of $13 billion. In addition, the company stepped up its commitment to reduce GHG emissions, targeting a 35% reduction by 2035 and climate neutrality by 2050."

 

Angel continued, "Looking ahead, the economic outlook remains uncertain. However, I have confidence in our ability to grow EPS double-digit percent from our industry-leading supply network and project backlog. And as I transition to Chairman, with Sanjiv Lamba taking the CEO reins, I'm convinced the best days for Linde lie ahead."

 

For the full year 2022, the company expects adjusted diluted earnings per share to be in the range of $11.55 to $11.85, up 8% to 11% versus prior year or 10% to 13% when excluding estimated currency headwinds. Full-year capital expenditures are expected to range between $3.0 billion and $3.5 billion to support operating and growth requirements, including the $13 billion contractual sale of gas and plant backlog. For the first quarter 2022, adjusted earnings per share is expected to be in the range of $2.70 to $2.80, 8% to 12% above prior-year quarter. This range assumes 3% unfavorable currency.

 

Linde Engineering sales were $946 million, 25% above prior year, and operating profit was $150 million or 15.9% of sales. Order intake for the quarter was $799 million and third-party sale of equipment backlog was $9.6 billion.