Executive Summary

Q4 2024 delivered resilient top line and strong margin expansion: sales $8.28B (flat YoY; +2% underlying), adjusted operating margin 29.9% (+250 bps YoY), and adjusted EPS $3.97 (+11% YoY; +13% ex-FX) .
Management introduced 2025 guidance: adjusted EPS $16.15–$16.55 (up 4%–7% YoY; 8%–11% ex-FX) and Q1 2025 adjusted EPS $3.85–$3.95, with an assumed ~4% FX headwind and flat industrial production at midpoint .
Segment performance was broad-based: Americas, APAC and EMEA expanded margins meaningfully; EMEA led with 33.3% OP margin (+400 bps YoY) despite softer volumes; Engineering margins stable at 16.9% with $3.3B third‑party SOE backlog .
Catalysts: execution on a record $7.1B sale-of-gas backlog, smaller on-site wins (59 contracts; 64 plants), and clean energy projects (Dow Canada; emerging CCS hub in Saudi). Macro/FX caution tempers guidance; management emphasized continued price productivity and disciplined capital allocation .

What Went Well and What Went Wrong

What Went Well

Margin and EPS strength: Q4 adjusted OP margin expanded to 29.9% (+250 bps YoY); adjusted EPS rose 11% YoY (13% ex-FX), supported by price attainment and productivity across segments .
Robust backlog and project wins: “more than $10B in backlog, including a record sale-of-gas backlog of $7B,” with ongoing momentum in small on-sites (59 long-term agreements; 64 plants) and electronics projects in the pipeline .
Strategic clean energy positioning: advancing decarbonization via blue hydrogen/CCS (e.g., Dow Canada Phase 1 >$2B; Saudi CCS JV first phase 9–11Mtpa CO2, with potential scale to ~54Mtpa across phases) .

Quotes:

“In 2024, the Linde team once again delivered industry leading results, including a 25.9% ROC, 29.5% operating margin and an EPS growth of 10% excluding currency.” — CEO Sanjiv Lamba .
“This combination of capital allocation and management actions is expected to deliver 10-plus percent EPS growth each year with margin expansion.” — CEO Sanjiv Lamba .
“Our returns typically for small on-site are above what we would see on average for some of the large projects.” — CEO Sanjiv Lamba .

What Went Wrong

FX headwinds intensified: USD strength was worse than expected late in Q4, driving an assumed ~4% translation headwind into 2025 guidance .
EMEA base volumes soft: Q4 EMEA volumes down in manufacturing and chemicals & energy, though margin expanded strongly (+400 bps YoY) .
Helium market pressure in APAC: flattish demand with regional pricing stabilization, impacted by Russian supply flows into China (Linde not using Russian supply) .

Analyst concerns:

Macro/IP leverage and visibility: management views IP near zero globally weighted; base volume sensitivity varies by market, with developing regions showing higher leverage .
Tariff and currency risks: LatAm currencies (MXN, BRL) and broader G10 basket devaluations in Q4; tariffs seen as de minimis on U.S. projects, mitigated by contract protections and potential FX offsets .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Sales ($USD Billions)	$8.27	$8.40	$8.28
Underlying/Organic Sales Growth YoY (%)	+3%	+2%	+2%
Adjusted Operating Profit ($USD Billions)	$2.42	$2.50	$2.48
Adjusted Operating Margin (%)	29.3%	29.6%	29.9%
Adjusted EPS ($USD)	$3.85	$3.94	$3.97
Diluted EPS (GAAP) ($USD)	$3.44	N/A	$3.60

Segment breakdown (Q4 2024):

Segment	Sales ($USD Millions)	Operating Profit ($USD Millions)	OP Margin (%)	YoY Sales Growth	YoY Margin Change
Americas	$3,609	$1,150	31.9%	+1%	+190 bps
APAC	$1,668	$500	30.0%	+2%	+240 bps
EMEA	$2,059	$686	33.3%	-2%	+400 bps
Engineering	$628	$106	16.9%	-5%	N/A

Selected KPIs:

KPI	Q2 2024	Q3 2024	Q4 2024
Operating Cash Flow ($USD Billions)	$1.93	$2.70	$2.81
Capital Expenditure ($USD Billions)	$1.13	N/A	$1.25
Free Cash Flow ($USD Billions)	$0.80	N/A	$1.56
Shareholder Returns ($USD Billions, quarter)	$2.10	N/A	$1.99

Notes: “Underlying” and “Organic” growth reflect price/volume excluding FX and cost pass-through as defined by management .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Diluted EPS	Q3 2024	$3.82–$3.92	Actual delivered $3.94	Beat range high
Adjusted Diluted EPS	Q4 2024	$3.86–$3.96	Actual delivered $3.97	Beat range high
Adjusted Diluted EPS	FY 2024	$15.40–$15.60	Actual delivered $15.51	In-range (mid-high)
Adjusted Diluted EPS	Q1 2025	N/A	$3.85–$3.95	New
Adjusted Diluted EPS	FY 2025	N/A	$16.15–$16.55 (up 4%–7%; 8%–11% ex-FX)	New
Capital Expenditures	FY 2025	N/A	$5.0–$5.5B	New

Assumptions embedded: ~4% FX translation headwind and flat industrial production at guidance midpoints .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/technology & productivity	Digital solutions/AI underpin price/productivity actions; network density supports growth	Targeted cost reduction (~2% workforce) to offset macro; continued pricing/productivity	Doubling down on management actions; 10%+ EPS growth algorithm via capital allocation + productivity	Stable to improving execution
Electronics	Recovery signs; TSMC Phase 1 startup, Samsung/Intel builds; base volumes improving	Electronics up YoY; inventories normalization anticipated Q4	20% of sale-of-gas backlog tied to electronics; more wins imminent	Positive momentum
Macro/IP	Cautious view; guidance assumes no improvement; organic volumes +3% sequential	Q4 guide assumed economic contraction; IP soft across EMEA/China	2025 guide assumes 0% IP growth; FX headwind ~4%	Cautious/neutral
Tariffs/regulatory	Longer FID due to uncertainty; robust U.S. policy 45Q supports CCS/blue hydrogen	Decarbonization project pipeline; blue hydrogen economics favored	Tariff impact de minimis; contracts protect SOE; FX often offsets tariffs; 45Q clarity	Manageable risk
Regional trends	Americas pricing strong; APAC helium pressures; China deflation; resilient F&B/healthcare	EMEA drag; North America resilient; India strong; China flat with electronics growth	EMEA volumes softer but margins leading; LatAm FX pressures; US flattish H1 then improving H2 expected	Mixed; margin expansion
Clean energy projects	OCI blue hydrogen; U.S. Gulf Coast network advantages	Dow Canada Phase 1; backlog contribution 1%–3% to EPS	Saudi CCS hub (JV; 9–11Mtpa phase; potential ~54Mtpa); further phases in North America	Building pipeline

Management Commentary

Strategy and performance: “We have more than $10 billion in backlog…record sale of gas backlog of $7 billion…We fully expect 10-plus percent EPS growth each year with margin expansion” .
Macro and guidance framing: “The current 2025 guidance range assumes a 4% FX translation headwind…midpoint assumes 0% IP growth” — CFO Matt White .
Segments: “Operating profit margin of 29.9% was 250 basis points above prior year” with price attainment and productivity driving gains .
Clean energy/CCS: “Three-way JV…first phase 9–11Mtpa CO2…potentially world’s largest CCS at ~54Mtpa by phase 3” — CEO Sanjiv Lamba .
Small on-sites: “Returns typically for small on-site are above…large projects; 10–15 year take‑or‑pay terms; faster execution (9–15 months)” .

Q&A Highlights

Macro/IP leverage and FX: Base volumes correlate to IP; higher leverage in developing markets; USD strength worsened late Q4, driving ~4% FX headwind assumptions .
Segment margin outlook: Expect margin expansion across Americas and APAC; long-term convergence across segments (20–50 bps typical annual expansion) .
Tariffs: Protections embedded in SOE; tariff impact de minimis on U.S. projects; FX often offsets any effects .
Helium: APAC pricing stabilized; China long due to Russian supply; Linde not using Russian helium .
Capex and backlog: 2025 capex step-up driven by $7.1B sale-of-gas backlog and clean energy/electronics projects .
Healthcare: Portfolio rationalization (home care) largely done; expect low-to-mid single-digit growth over time .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue was requested but unavailable at time of analysis due to vendor request limits. As a result, explicit “vs. estimates” comparisons are not included. Attempted retrieval failed: “Daily Request Limit of 250000 Exceeded.”
Where guidance ranges were compared to actuals (Q4 and FY 2024), outcomes indicated in-range or slight beats to the high end .

Key Takeaways for Investors

Margin discipline continues to differentiate: sustained price/productivity execution and segment-wide margin expansion underpin earnings even in flat IP environments .
Backlog visibility is high quality: $7.1B sale-of-gas and >$10B total backlog provide multi-year, contract-backed earnings contributions (1%–3% EPS annually) .
Clean energy optionality maturing: Dow Canada and Saudi CCS hub position LIN in scalable, contracted decarbonization projects with attractive returns .
FX remains the key swing factor: ~4% headwind embedded in 2025 guide; potential local inflation could open incremental pricing opportunities not yet in guidance .
Americas resilient; EMEA margins lead despite volume softness; APAC supported by electronics project startups—expect further convergence in segment margins .
Short-term: trade tactically around FX and macro prints; watch Q1 2025 EPS delivery vs $3.85–$3.95 range and any updates on electronics wins and CCS FID .
Medium-term: thesis anchored on contracted backlog, disciplined capital allocation (capex to backlog, buybacks), and structural margin expansion; decarbonization pipeline provides upside optionality .

LINDE PLC (LIN)·Q4 2024 Earnings Summary