Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on LINDE AG. We currently have 15 research reports from 2 professional analysts.
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2017 revenue guidance: +3% but it might also be -3%
09 Mar 17
Linde suffered a sales and profit setback in Q4 16 and this resulted in full-year numbers that were slightly lower than we had expected. Revenue, compared to the 2015 accounts, were down by 5.6% to just below €17bn, EBIT was down by 1.1% to €2.02bn and pre-tax earnings increased by 6.4% to €1.75bn. Our respective projections were €17.18bn, €2.13bn, and €1.85bn. However, we had expected an unchanged dividend of €3.45 whereas management is proposing €3.70, although the 2017 guidance is very confusing.
Prohibited insider trading?
15 Jan 17
The German watchdog Bafin is investigating potential insider trading at Linde. According to the allegation, Wolfgang Reitzle, the Chairman of the Supervisory Board, bought 4,000 shares in June for around €123 per share after being promoted to this position in May. However, at that time, Linde and Praxair had started to discuss their merger and the first speculations about the merger were made public in August. Assuming Bafin is right that the discussions between the two companies had started in June, Reitzle’s transaction was illegal.
Chaos at the helm intensifies with the second intended Praxair merger
08 Dec 16
Wolfgang Reitzle, Chairman of the Supervisory Board, is again pressing Linde into a merger of equals with Praxair. As a result, CEO Wolfgang Büchele has stepped down with immediate effect and Aldo Belloni, a Linde Management Board member from 2000 to 2014, has been brought out of retirement. Belloni and Reitzle were both Linde top managers through to 2014, i.e. they can be regarded as buddies. The above management changes are the result of Reitzle having re-opened the merger negotiations with Praxair to make Linde the world’s largest industrial gas producer, which in itself is no viable economic goal for us. In the context of the first merger talks in summer of this year, the then CFO Denoke stepped down with immediate effect (or was most likely fired as he rejected the deal) and CEO Büchele decided not to prolong his contract beyond 2017. It seems to us that the two buddies (i.e. Reitzle and Belloni) will try whatever they can to merge the two companies. It is surprising to us that the Supervisory Board has apparently unanimously (i.e. including employee and union representatives) agreed to the negotiations. However, a glance at the composition of the Board reveals that it is hardly made up of genuinely independent members.
Linde (LIN GY) / Praxair (PX US) – Round 2
30 Nov 16
Linde confirmed yesterday it has received a revised proposal concerning a potential merger of equals. Linde’s executive board is currently reviewing the proposal. Praxair confirmed yesterday that it has “approached Linde about resuming discussions on a possible merger”. Its no great surprise that talks have been rekindled. Especially after the management changes which followed quickly after talks last broke down over the Summer.
Linde delivered what we had expected
28 Oct 16
Revenue fell by 2.4% to €4.4bn in Q3 and by 4.3% to just below €13bn ytd. Simultaneously, the respective EBIT numbers were up by 3.7% to €527m and 5.6% to €1.62bn and the pre-tax profit numbers by 13% to €458m and 11% to €1.37bn. All these numbers are slightly ahead of our expectations.
Management in shambles
14 Sep 16
After the merger with Praxair was called off, CFO Denoke was made to leave with immediate effect and CEO Büchele will not extend his contract which expires in 2017. There was no wishing him well in Linde’s statement for Denoke but there was for Büchele. We can only speculate why this chaos is suddenly appearing. The Chairman of the Supervisory Board, Reitzle, who was the acting CEO until 2014, joined the Board in May this year. He is believed to have been the driving force behind the intended merger and seems to have been supported by Büchele but not by Denoke and not by several other shareholder representatives on the Board. If this speculation is correct, Reitzle should also step down.
N+1 Singer - T. Clarke - Strong conclusion to FY16, record order book
28 Mar 17
After significant upgrades at the time of the full year update (PBT forecast +43% FY16; +14% FY17), today’s results are c.4% ahead of our expectations at the PBT level and show strong growth on the prior year (PBT +48%). All regions achieved positive growth in revenue. The outlook statement refers to a still growing order book (£350m at the end of February vs. £330m at the year end) and the strength of recent trading, with London & the South East and Scotland said to be particularly positive. The Group has reiterated its ambitions to improve margins, but we have not incorporated this into our forecasts at this stage. We have nudged up our FY’17 forecasts (PBT +5%) and introduced FY’18 forecasts that imply 2% PBT growth. Despite the well justified bounce in the share price, the shares still trade at a significant discount to the peer group (7.6x FY17 PE, 4% yield).
Panmure Morning Note 29-03-2017
29 Mar 17
We are cutting our recommendation to HOLD as we see little upside from current levels given the lack of positive surprises in today’s trading update. Multiples of 4.4x 2017 sales and 17x 2017 EBITDA imply an expectation of at least slightly exceeding expectations. We had assumed that acquisitions will provide the momentum until organic investments deliver. However, acquisitions are proving elusive and excess cash is diluting returns. Moreover, our forecast relies on at least one order in vehicle simulator market, which has yet to be announced. The management has shown that it can use the financial markets to raise equity but it now needs to show that it can deploy excess equity productively.
N+1 Singer - Severfield - Strong H2 drives upgrades; CEO temporarily steps down due to ill health
28 Mar 17
Severfield’s trading update highlights that trading during H2 was strong and the Group now expects results to be ahead of expectations. Cash flow performance has been similarly strong with net funds at the year end also expected to be ahead of expectations. The strong performance was driven by both a better than expected revenue performance and better than expected growth in the operating margin. We expect to increase our FY16 PBT forecasts by c.9% to around £19.5m. In addition, we are disappointed to see that Ian Lawson (CEO) has taken a temporary leave of absence due to physical ill health. John Dodds (non-executive Chairman) will step up to Executive Chairman on an interim basis and Alan Dunsmore (FD) has agreed to assume the role of CEO on a similar basis. This should ensure the continuity of the business whilst Ian is recovering. The outlook for Sevefield remains positive and the Group has reiterated its medium term target to double PBT from £13.2m in FY16 by FY20. We remain positive on Severfield (one of our best ideas for 2017) and continue to see clear potential for it to outperform its medium term targets.
28 Mar 17
ClearStar* (CLSU): Building a background for growth (CORP) | Sound Energy (SOU): TE-8 results (HOLD) | LiDCO* (LID): 2017 should be a transformative year (CORP) | Proteome Sciences* (PRM): FY 2016 in line. Moving towards breakeven (CORP) | Fulcrum (FCRM): Significant market potential, rising margins and a strong balance sheet (BUY) | Mortgage Advice Bureau (MAB1): Strong and growing intellectual property (BUY) | 7digital* (7DIG): Open offer result (CORP)