1. finance
2. investing
3. stocks

L i n d e F i n a n c i a l R e p o r t 2 014
Linde in the
­capital ­market
R em u neration ­report < 5 8
Linde in the
­c ap i tal ­ma r k e t
75
B u siness model of >8 0
T h e L inde G ro u p
75
Increase in DAX in 2014
In 2014, most international stock exchanges were affected
by continuing monetary stimuli and by the lack of investment alternatives in the low interest environment. Despite political unrest, such as that in ­Ukraine, ­share prices
benefited from these factors. It was not until the second
half of the year that growing economic concerns and the
significant fall in the oil price led to a drop in ­share prices.
The ­German ­share index DAX started the trading year
at 9,590 points and this was followed by a rather volatile
period for the index. In J­une 2014, it broke through the
10,000 points mark for the first time. As a result of worsening economic data from the ­United ­States, ­share prices
went down, with the DAX falling to its lowest level for the
year of 8,572 points on 16 October 2014. For the remaining
part of the year, the trend was back up. On 5 December 2014,
the DAX reached its highest level for the year of 10,093
points, ending the year at 9,806 points. This was 2.7 percent
higher than at the end of the 2013 financial year.
Most of the other major ­European stock market indices
performed similarly. The MSCI Euro Index gained in value
by 2.0 percent and the DJ EURO STOXX by 1.7 percent. The
FTSEurofirst 300 Index in London increased by 4.0 percent.
Only the CAC 40 Index in Paris fell, dropping by 0.5 percent.
The US stock markets again saw more dynamic trends
than in ­Europe. The S & P 500 Index was up 11.6 percent,
while the NASDAQ technology index (NASDAQ composite)
rose by 13.4 percent. In the emerging economies, however,
the picture was different. The MSCI Emerging Markets Index lost 4.6 percent in the course of 2014.
Slight upward trend for ­Linde ­shares
In this environment, over the year there was a slight upward trend in the price of ­Linde ­shares. The closing price
of the ­shares was EUR 154.20, 1.4 percent higher than the
price at the end of 2013 of EUR 152.05. This meant that there
was also a slight increase in the Group’s market capitalisation of 1.4 percent to EUR 28.625 bn (31 December 2013:
EUR 28.219 bn).
­Linde ­shares had a modest start to 2014, with the lowest
price for the year (EUR 139.15) being reached on 5 February 2014. The ­shares recovered strongly in the middle of the
year in a favourable stock market environment, with the
price reaching its highest level for the year of EUR 157.30
on 20 June 2014. This price was also a new all-time high for
­Linde ­shares. In the second half of the year, ­Linde ­shares
performed in line with the DAX, although the Group was
only able to report relatively low growth. In the first part
of ­October, ­Linde ­shares were even outperforming the
­German ­share index. However, when the Group revised
its targets at the end of the month, the ­shares saw a significant if temporary decline. However, they quickly recovered as the year came to an end, finishing 2014 almost
back in line with the overall trend of the DAX.
Despite the difficult operating environment, especially
in the second half of the year, the relatively steady overall
performance of L­ inde ­shares is evidence that the capital
market appreciates the Group’s business model which is
characterised by long-term contract structures, a broad
customer base and stable cash flows. At the same time,
­Linde’s international ­gases and engineering business continues to offer attractive opportunities for development.
The capital market also acknowledges that ­Linde has
enhanced its robustness by focusing on the expansion
of its Healthcare business, which is largely immune to
cyclical economic trends. The ­Group’s very good position
in growth markets is also viewed positively. Linde uses
the term “growth markets” to describe the emerging economies (comprising the regions of Eastern Europe, Africa,
South & East Asia and ­Greater ­C hina) plus the region of
North America. The continuing implementation of ­Linde’s
holistic HPO (High ­Performance Organisation) programme,
which is designed to achieve lasting efficiency improvements, and the evolution of the ­Group as a learning organisation, also contribute to the positive assessment of
­Linde in the capital market. The announcement that ­Linde
will continue to build on its strengths and focus even
more on efficiency will also enhance the confidence of
market participants.
­Linde also made progress during the financial year
in terms of sustainability ratings in the capital market.
In ­September  2014, the Group was again included in the
global Dow Jones Sustainability Index (DJSI World). Analysts at RobecoSAM acknowledged the Group in particular for its activities in the fields of customer relationships,
compliance, and risk and crisis management. The regional
index of the CDP investor initiative nominated the Group
for its good climate protection reporting. In 2014, ­Linde
also qualified for inclusion in the FTSE4Good Index Series.
The leading international rating agencies Moody’s
and Standard & Poor’s award ­Linde a high credit rating.
In ­December  2014, Standard & Poor’s confirmed its good
credit rating of A+ with a stable outlook. Moody’s increased
its rating of the Group in J­une 2014 by one notch from A3
to A2 with a stable outlook. In ­December 2014, Moody’s
reconfirmed this credit rating. The agencies hereby recognise the Group’s conservative financial policy and its
robust business model as well as its good liquidity situation.
During the financial year, L­ inde was able to benefit repeatedly from these ratings and from the good conditions
in the international capital markets for corporate bonds.
In the second quarter of 2014, the Group issued a ten-year
EUR 300 m bond with a 1.875 percent coupon. The bond
L i n d e F i n a n c i a l R e p o r t 2 014
issue was used to provide additional external funding for
the pension plans in ­Germany. In the third quarter of 2014,
the Group also placed two USD 200 m bonds to refinance
a USD 400 m bond maturing in ­November 2014.
In 2014, the EUR 2.5 bn credit facility agreed in J­ uly 2013
was successfully extended by one year to 2019. The credit
facility originally ran for five years, with two options to
extend the facility, in each case by one year (subject to
the agreement of the lenders). One option to extend the
facility in 2015 by one year remains.
With the syndicated credit facility supplementing its
liquid funds, L­ inde had a solid general liquidity reserve
at the end of 2014.
8 Capital market-based figures
2014
2013
No.
185,638,071
185,587,803
Year-end closing price
€
154.20
152.05
Year high
€
157.30
153.90
128.60
Number of shares with dividend entitlement for the financial year
€
139.15
Total dividend of Linde AG for the financial year
€ million
585
557
Market capitalisation1
€ million
28,625
28,219
No.
2,267,308
2,257,467
%
16.2
14.6
Cash dividend
€
3.15
3.00
Dividend yield
%
2.0
2.0
Operating cash flow
€
16.17
16.94
Earnings (reported EPS)
€
5.94
7.10
Year low
Average weekly volume
Volatility1 (200 days)
1
As at 31 December.
1 Linde Share Performance in 2010 – 2014 compared with indices
76
L i n d e i n t h e c­ a p i t a l m
­ arket
Information per share
Index in %
220
190
160
130
100
70
06.2010
Linde AG 12.2010
Prime Chemical 06.2011
DAX 12.2011
06.2012
DJ Euro Stoxx Chemical 12.2012
06.2013
12.2013
06.2014
12.2014
L i n d e F i n a n c i a l R e p o r t 2 014
1 Institutional Investors ­h oldings by ­r egion in %
9 L inde performance in comparison
with the most important indices1
2014
in percent
Weighting
Linde
shares
in percent
Linde (including dividend)
3.4
–
Linde (excluding dividend)
1.4
–
DAX
2.7
3.31
Prime Chemical
4.0
13.01
DJ EURO STOXX
1.7
0.81
DJ EURO STOXX Chemical
1.4
7.94
FTSEurofirst 300
4.0
0.46
FTSE E300 Chemical
2.8
9.03
MSCI Euro
2.0
0.42
1
As at 31 December 2014.
77
Stable ­shareholder structure
In the annual s­ hareholder identification survey, ­Linde identified the ­shareholders of around 79 percent (2013: around
77 percent) of the ­shares outstanding at 31 December 2014.
These are solely institutional investors. In the case of the
­shareholders who have not been identified, it is assumed
that 79 percent of these ­shares too can be allocated to institutional investors. On the basis of this approach to the
calculation, the proportion of private investors who held
­Linde ­shares at 31 December 2014 was around 5 percent
(2013: 5 percent).
The proportion of institutional investors from the ­United
­States was around 38 percent at the end of 2014, compared
with 35 percent at 31 December 2013. US investors continue to constitute the largest group of investors from a
single country. The proportion of ­shares held by ­European
institutional investors remained the same at 58 percent.
However, the proportion of ­shares held by institutional
investors in the Scandinavian countries (included in the
figure for ­European institutional investors) increased again,
from 9 percent to 13 percent. At 31 December 2014, ­German
institutional investors held 14 percent of ­Linde’s ­shares
(31 December 2013: 16 percent). The proportion of British
institutional investors rose slightly from 13 percent at the
end of 2013 to 15 percent at the end of 2014. The proportion of Asian investors remained constant at 4 percent at
the end of both 2013 and 2014. The proportion of investors
who are oriented towards sustainability increased during
the reporting period to around 11 percent (2013: 7 percent).
In the past year, L­ inde has again succeeded in broadening its investor base to include a number of investors
who take a long-term view. The Group’s business model is
geared towards sustainable, profitable growth. L­ inde also
benefits from a stable financing structure which is geared
towards the long term and therefore offers investors an
attractive investment with the opportunity for long-term
wealth creation.
5
4
4
7
38
13
14
USA
Great Britain
Germany
Scandinavia
38 (2013: 35)
15 (2013: 13)
14 (2013: 16)
13 (2013: 9)
15
France
Other
Switzerland
Asia
7 (2013: 8)
5 (2013: 7)
4 (2013: 8)
4 (2013: 4)
L i n d e F i n a n c i a l R e p o r t 2 014
Dividend payment
L­ inde has adopted an earnings-based dividend policy
geared towards continuity. The ­Executive ­B oard and
­Supervisory ­Board will recommend the payment of a dividend of EUR 3.15 per ­share at the ­Annual General Meeting
on 12 May 2015. This is an increase of 5.0 percent over the
prior-year dividend of EUR 3.00. This gives a dividend payout
ratio of 53.1 percent (2013: 42.3 percent) based on the net
income for the year attributable to ­Linde AG ­shareholders.
The dividend yield was around 2.0 percent (2013: 2.0 percent) based on the year-end closing price.
Resolutions passed at the ­Annual General
Meeting on 20 May 2014
At the ­Annual General Meeting held on 20 May 2014, no
resolutions were passed to create or abolish conditionally
authorised or authorised ­share capital or to authorise the
purchase of own s­ hares.
78
L i n d e i n t h e c­ a p i t a l m
­ arket
High level of investor relations (IR)
­activities sustained
In 2014, L­ inde continued its extensive efforts to communicate with participants in the capital markets, conducting
over 800 conversations with investors. At more than 50
conferences and roadshows around the world, several
events for private investors and in the course of plant visits
on several continents, L­ inde has offered its ­shareholders
and potential investors the opportunity to speak personally to representatives of the Group, including members
of the ­Executive ­Board.
At ­Linde’s second Capital Market Day, which was held
in 2014, investors and analysts were given the chance to
discuss in detail the future challenges and opportunities
faced by ­L inde with all the members of the ­Executive
­Board and selected experts from the Group.
The Group also held an event for sell-side analysts. This
event, which has become a fixture in recent years, provides
analysts with an opportunity for dialogue with members
of the ­Executive ­Board of ­Linde AG about new trends and
about the business performance and future of the Group.
A key focus of L­ inde’s communications with the capital
markets is the strategic development of the Group. The
priority is to continue to build on ­L inde’s core competences, thereby enhancing the efficiency of the whole
Group. Moreover, ­Linde provided a commentary on the
current business performance of the whole Group and
the impact of exchange rates and the global economic
climate. It was able to convince ­German and international
investors about the potential of its products, technologies
and services in the promising areas of energy, the environment and healthcare.
Transparency, continuity and reliability will remain the
guiding principles for L­ inde’s investor relations work in
2015. The IR team will put forward the arguments which
continue to make an investment in the Group an attractive proposition: its forward-looking and robust business
model characterised by long contract periods, financing
geared towards the long term and an excellent position
in the fast-growing business sectors.
All current information about ­Linde ­shares can be found
at the Group’s website at W W W. L I N D E . CO M in the Investor
Relations section. Information and answers to any questions you may have can be obtained by calling the IR team
on +49.89.35757-1321. You are also welcome to send us
your questions online at I N V E S TO R R E L AT I O N S @ L I N D E . CO M .
10 Linde share information
Type of share
Stock exchanges
Security reference numbers
Bearer shares
All German stock exchanges
ISIN DE0006483001
CUSIP 648300
Reuters (Xetra)
Bloomberg
LING.DE
LIN GR
L i n d e F i n a n c i a l R e p o r t 2 014
Financial calendar
[1]
P R E S S C ON F E R EN C E ON
T H E ANNUA L R E S U L T S
PU B L I C AT I ON O F T H E G R OUP
F I NAN C I A L S TATE M ENT S
16 March 2015
Carl von Linde Haus, Munich,
­Germany
[2]
I NTE R I M R EPO R T
J ANUA R Y TO M A R C H 2 0 1 5
30 April 2015
[3]
281
ANNUA L G ENE R A L M EET I N G
2015
12 May 2015, 10 a. m.
International Congress Centre, Munich,
­Germany
[4]
D I V I DEND PAY M ENT
13 May 2015
[5]
I NTE R I M R EPO R T
J ANUA R Y TO J UNE 2 0 1 5
29 July 2015
[6]
AUTU M N P R E S S C ON F E R EN C E
2015
28 October 2015
Carl von Linde Haus, Munich,
­Germany
[7]
I NTE R I M R EPO R T
J ANUA R Y TO S EPTE M B E R 2 0 1 5
28 October 2015
[8]
ANNUA L G ENE R A L M EET I N G
2016
3 May 2016, 10 a. m.
International Congress Centre, Munich,
­Germany
Statements relating to
the future
This annual report contains statements relating
to the future which are based on management’s
current estimates about future developments.
These statements are not to be understood as
guarantees that these expectations will prove
to be true. The future development and the
results actually achieved by The Linde Group
and its affiliated companies are dependent on
a number of risks and uncertainties and may
therefore deviate significantly from the statements relating to the future. Linde has no plans
to update its statements relating to the future,
nor does it accept any obligation to do so.