Linde (LIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $8.3 billion, up 1% year-over-year, with record adjusted EPS of $3.85 (up 8%) and operating margin of 29.3%, driven by strong pricing and productivity despite flat volumes and a challenging macro environment.

• Adjusted operating profit rose 6% to $2,422 million, and after-tax return on capital reached 25.7%, up year-over-year.

• Project backlog execution remains strong, with $7.9 billion in high-quality projects and $700 million in new SOG projects started.

• Free cash flow for Q2 was $796 million, and $2.1 billion was returned to shareholders via dividends and buybacks.

• Disciplined pricing and proactive management actions continue to drive earnings growth, with no meaningful economic recovery assumed in guidance.

Financial highlights

• Q2 operating profit grew 6% to $2.4 billion, with all gas segments expanding margins; EMEA led with a 33.7% margin.

• Operating cash flow was $1,929 million, down 10% year-over-year due to engineering project prepayment timing.

• Capex for Q2 totaled $1,133 million, up 32% year-over-year, with project capex up 83%.

• Free cash flow for Q2 was $796 million.

• Adjusted EBITDA margin for Q2 was 38.8%.

Outlook and guidance

• Q3 2024 adjusted EPS guidance is $3.82–$3.92, up 5–9% year-over-year (6–9% ex-FX), assuming no economic improvement.

• Full-year 2024 adjusted EPS guidance is $15.40–$15.60, up 8–11% year-over-year (9–11% ex-FX), with the bottom end increased by $0.10.

• Full-year capex expected between $4.0 billion and $4.5 billion.

• Guidance remains cautious due to ongoing macro uncertainty; proactive measures will be taken if conditions worsen.