Linde (LIN) Q4 2023 earnings summary

Executive summary

• FY 2023 sales were $32.854B, down 2% YoY; underlying sales grew 5%. Adjusted operating profit rose 15% to $9.070B and adjusted diluted EPS increased 16% to a record $14.20.

• Q4 sales grew 5% to $8.302B; adjusted operating profit rose 14% to $2.272B and adjusted diluted EPS increased 14% to $3.59.

• Record FY adjusted operating margin was 27.6%; after-tax ROC reached 25.4%. Project backlog ended the year at $8.5B.

Financial highlights

• FY adjusted net income was $6.989B; reported net income was $6.199B. Adjusted diluted EPS was $14.20 versus reported diluted EPS of $12.59.

• Q4 adjusted net income was $1.753B, up 11%; reported net income was $1.543B, up 16%. Adjusted diluted EPS was $3.59; reported diluted EPS was $3.16.

• FY adjusted operating profit was $9.070B, up 15%; adjusted operating margin was 27.6%, up 390 bps YoY or 310 bps excluding cost pass-through effects.

• Q4 adjusted operating margin was 27.4%, up 210 bps YoY or 130 bps excluding cost pass-through effects.

• FY operating cash flow was $9.305B, up 5%; Q4 operating cash flow was $2.727B, up 30%, with free cash flow of $1.576B after $1.151B of capital expenditures.

Outlook and guidance

• FY 2024 adjusted EPS guidance is $15.25–$15.65, up 7%–10% YoY or 8%–11% excluding estimated 1% FX headwind; midpoint assumes no economic improvement.

• Q1 2024 adjusted EPS guidance is $3.58–$3.68, up 5%–8% YoY or 6%–9% excluding estimated 1% FX headwind.

• FY 2024 capital expenditures are expected to be $4.5B–$5.0B, supporting operating and growth requirements, including the contractual sale-of-gas backlog.