gasworld Business Intelligence provides you with the latest analysis of Linde’s Q3 2016 earnings reports.
Headlines
- Total corporate sales reported at €4.4bn in Q3 2016 were down -2.5%, but virtually flat when excluding currency. This is better than the previous quarter, which showed the weakest reported growth since late 2013.
- Reported gases growth also remained negative in Q3, but showed a marginally less negative performance at -4% YoY than in Q2. However, this was still the weakest performance in recent years on a comparable basis.
- Engineering sales were marginally up YoY in Q3, but, remain well below the average of recent years. On the other hand, order intake was strong in Q3 and boosted backlog.
- Gases account for around 80% of Linde corporate sales, with engineering nearly 20%, and other businesses (mainly Gist distribution) less than 2%.
- 2016 growth expectations are unchanged with corporate ranging from -3% to 4%, excluding currency, and gases ranging from 0% to 5%.
- Reported corporate operating income showed solid improvement YoY to over €575m.
- Reported gases operating income was flat YoY after adjusting for restructing charges in the current and prior year.
- Restructuring charges of €50m were taken in Q3, the first in 2016. This is slightly below the charges in Q3 last year, which were part of a 2015 total of nearly €200m. These charges were primarily in the gases business.
- Further charges are expected in Q4 and throughout next year. A total amount of €400m expected in 2016/17 generating €370m in cost savings by end 2019.
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