林德：在战略决策会议上与首席执行官的一天 - 价值显而易见

F25E29.018.43 Jun 2025487.31/408.656M2.714.8(12.2)06/2512001300140015001600 Price TargetLIN.UWAdjusted EPSLIN.UW (USD)OLDSource: Bloomberg, Bernstein estimates and analysis.Linde was represented at the 41st Annual Bernstein Strategic Decisions Conference on 28May by Sanjiv Lamba, CEO, and Juan Pelaez, Head of IR. The recurring themes from a wholeday spent together encapsulated what makes LIN stand out, and why we have liked the storyfor well over a decade, and it has been a sector top pick for nine years. The key comments -On management/culture- Whilefocus on a performance excellence culture and operatingrhythm is absolutely consistent with his predecessor, (Steve Angel, now Chairman), the CEOspendsmore time “in the field”, meeting and getting close to customers (recently visiting10 countries in 10 weeks, which he sees as a competitive advantage),and also in the “guts”of the business (“you can’t manage LIN from above”). All employees know how they fit in tothe broader company strategy, a “hallmark” of Linde’s culture, and the top 1100 managers(and a level below) are onthe same shareholder aligned, compensation metrics as theCEO, who wants all senior managers to feel like owners.On the business- in LIN’s density & discipline model, where it leverages the advantages ofits leading integrated business,the CEO sees and thinks networks first, ahead of country/region. Noting again wesee LIN being able to provide the highest level of service andefficiency at the lowest cost and drive the strongest profitability.In that vein,long-term credibility has come from reliability, with the“value [of gases supply very] visibleto customers. Or as the CFO, Matt White, likes to say“we sell reliability”link.On delivery-Linde’s (10%+) EPS Algorithm remains intact.Management Actions (price,productivity/cost) driving 4-6% EPS growth whatever the environment (and very stable overthe LT), and Capital Allocation 4-6% p.a. (capex, the backlog, M&A and buybacks).On price- LIN has delivered 25 consecutive years (and quarters) of +ve price and this is not aboutto change (and it is not running a ‘huge’ premium vs. peers, noting again it’s reliability andservice that really matters).On productivity—almost every employee is involved andincentivised, it’s a key part of the culture, and reflected in 15-16k bottom-up projects pa. asit looks to cut 5%+ from the cost stack pa. (with AI/digital tools increasingly important).Continued on the next page…See the Disclosure Appendix of this report for required disclosures, analyst certifications and otherimportant information. Alternatively, visit our Global Research Disclosure Website.First Published: 04 Jun 2025 16:12 UTC Completion Date: 04 Jun 2025 16:12 UTC F24AF25EF26E15.5116.2517.89----17.86FinancialsF24AF25EF26ECAGRReported EPS15.5116.2517.89--EBIT (M)9,7209,95510,770--EBIT Margin (%)29.530.231.2--F26E26.417.2Close Date471.82500.006%EDM1,429.05FYEDecDiv Yield1.3%222,097EV (USD) (M)242,131Performance12MAbsolute (%)9.4EDM (%)10.5Relative (%)(1.1)$520$500$480$460$440$420$40006/24 ...continued from the first pageOn margins - “there is no cap”, instead for the last year or so, rather than the 30% targetit had for all countries/gases regions, LIN has pointed to multiple countries in all regionsdelivering 40%+ EBIT margins. The CEO expects progressive improvement to ensure the LT30-50bp pa. average improvement over 30+ years at least continues. This is facilitated bysharing of best practice, ‘obsessive’ benchmarking and a leadership board.On growth- There has been no change in trading trends, (albeit China volumes in May wereactually flat rather than down, ditto US hardgoods) and Linde still thinks industrial recessionis the most likely outcome, (hence FY guidance for base gases volumes down 2%), butlooking further ahead inevitably at some point it expects an industrial growth to recover aftersix negative quarters already since 2022, and as such management are preparing, includinga ‘growth summit’ this week. As for LIN’s operating leverage on recovery (focused especiallyon industrial bulk and packaged gases units, but not exclusively) LIN still points to 2021 whenvolumes grew 8%, and EPS was up almost 20%.On the backlog, clean hydrogen and electronics- The CEO remains very confident,the backlog will end the year around the current $7bn level, despite an expected $1bn ofprojects start-ups in 2025. Within this, in electronics which accounts for around 20% ofthe current backlog, this may include a second phase to TSMC Arizona. As for the c.$2bnDow Path2Zero project, which has been paused by Dow, work is ongoing and LIN remainsconfident given the very favourable cost and incentive advantages of the project. The pauseis about cycle timing, with a delay up to 12-18 months, but again reiterates the project hastypical onsite gas project protection. Aside from that the $8-10bn target for clean hydrogenprojects over the next few years still stands and LIN also noted, increased pragmatismemerging in the EU of