Linde plc

Ladies and gentlemen, thank you for standing by and welcome to the Q1 2020 Lindy Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Juan Perez, Head of Investor Relations. Please go ahead, sir.

Thank you, Raquel. Good morning, everyone, and thank you for attending our first quarter 2020 earnings call and webcast. I am Juan Perez, Head of Investor Relations, and I'm joined this morning by Steve Angel, Chief Executive Officer, and Matt White, Chief Financial Officer. Today's presentation materials are available on our website at lindy.com in the Investor section. Please read the forward-looking statement disclosure on slide two of the presentation and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are in the appendix to this presentation. Steve and Matt will now give an update on Lindy's first quarter performance and will then be available to answer questions. Let me turn the call over to Steve.

Thanks, Juan. I am very proud of how our employees all over the world have responded during this crisis. Through our business continuity plans, including our remote operating capability, we have been able to continuously serve our customers while keeping our employees safe. We ramped up supply of vital medical oxygen to help our community hospitals fight this virus. We installed oxygen equipment for emergency and temporary care facilities practically overnight. Our employees performed heroic acts to get critical respiratory equipment like ventilators to people in need. We commissioned air separation plants for Samsung in the middle of this crisis in South Korea. And throughout all of this, we maintain best-in-class safety performance. Our respiratory home care business in the U.S., Lincare, has become an important second line of defense to fight COVID-19. providing ventilators to hospitals, transitioning thousands of patients from hospital to home care, and maintaining continuous respiratory care for their base of 1.6 million home care patients. Some of you are aware that Lindy has entered the market to provide inhaled nitric oxide therapy to patients in the U.S., Inhaled nitric oxide is most widely known as a treatment for infants in respiratory distress, commonly known as blue baby syndrome. But more recently, nitric oxide has been used as a treatment for COVID-19 by doctors around the world. This is just a few examples of what we are doing in healthcare to fight COVID and other respiratory illnesses. I might add that the government does recognize the critical role a world-class respiratory home care company like LendCare provides during a crisis like this. Please turn to slide three. We have talked about the resiliency of our business for years. Our Q1 results and four-year outlook should give you further proof of that resiliency. What is it that makes us so resilient? First of all, our commercial terms and conditions guarantee us a steady stream of cash flow. We serve diversified end markets, including healthcare, food, beverage, and electronics. These markets are more defensive but also offer nice opportunities for growth. Our business is local. We source, produce, and sell our products locally. We are not directly impacted by supply chain disruptions. And because we operate our businesses locally, we know exactly how to align our cost structure with the market realities on the ground. The $9.5 billion of projects in our backlog are all under contract and protected by terms and conditions that lock in a significant portion of our expected return. For example, our date certain provision guarantees that we will receive our take or pay when we are ready to supply our product, as opposed to when the customer is ready to take the product. Do we expect to see some slippage of scheduled? Yes, but no cancellations. That would be way too expensive for our customers. Who are the customers of these projects, you may ask? They are blue chip companies you know well, like Samsung. TSMC, ExxonMobil, Shell, BASF, and Phillips 66. Obviously, no one really knows what this recovery will look like. What I do know is we have a very resilient business model operated by a highly capable, experienced, and dedicated global team. If the financial crisis of 2009 is any guide, We held EPS flat, x the effects of currency, and we doubled our free cash flow. And though volumes were down double digits, pricing was positive. We also raised our dividend, just as we have done now for 27 straight years. And we have no intention of ending that streak now. We do have growth opportunities, both during and on the other side of this crisis. I have already mentioned a few in the healthcare space. I expect electronics to remain strong, particularly semiconductors, driven by the demand for IT infrastructure as our economy shifts more towards virtual work. The growth of artificial intelligence and the rollout of 5G communications. We will be starting up our project backlog over the next several years, and we expect to see continued growth from merger synergies. I talked about this in our last call. It is leveraging the joint capabilities of our two companies across a larger global footprint. That includes applications, particularly in more resilient end markets, an A to Z portfolio of product line plants, and the opportunity to further optimize each plant size from a total cost of ownership standpoint. I also expect to see more acquisition opportunities, like decaps, but we have to be selective here. I have no interest in being the lender of last resort. But the most exciting opportunities will come as the world drives towards a lower carbon future, especially green hydrogen for mobility. I expect this alone to become a multi-billion dollar business for lending. I have said before that I wouldn't trade places with anybody. That has never been more true than it is today. It's a privilege to lead this company and this team. I will now turn it over to Matt to discuss Q1 results and outlook.