Linde plc

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2020 Lindy Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during that session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any assistance during the call, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Juan Paliz. Sir, you may begin.

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

Thanks, Juan, and good morning, everyone. Another outstanding performance by the Linde team worldwide. And I'm thinking especially about all our employees who have been delivering products, servicing customers, filling cylinders, operating plants, building plants, and taking care of patients. And they have been doing that uninterrupted from the beginning of this pandemic. You can see we delivered very strong financial performance this quarter. We achieved record operating margins in all our gas segments, driven by good cost and price management and better volumes, which we were able to leverage down the income statement. Based on our fourth quarter guidance, we expect to deliver 12 percent earnings per share growth for the full year on top of 23 percent growth last year As expected, the more resilient markets we serve, healthcare, electronics, and food freezing, continue to perform well. And our fixed fee contracts have protected us from volume reductions in the more cyclical end markets. Geographically, all segments showed volume improvement versus Q2, but still remain below pre-COVID levels. Going into Q4, I expect volumes in Asia, led by China, Taiwan, and South Korea, to be positive both sequentially and year-over-year. However, we see growth flattening out in both the Americas and Europe sequentially as COVID cases continue to rise or remain at elevated levels. The impact is most pronounced in our metals and manufacturing market segments. This is consistent with published macroeconomic data and with what you're hearing from other companies. I know there's a lot of interest regarding 2021. I think we will all acknowledge COVID is a bit of a wild card at this point. What I am confident in is the resiliency of our integrated supply business model, which we've been clearly demonstrating. Our ability to achieve positive pricing in any environment, the strength of our backlog, and our ability to achieve cost efficiencies on an ongoing basis. Assuming stable volumes, I am confident that we will deliver another year of double-digit earnings growth in 2021. This is all I can share with you on 2021 today, but we will provide a more detailed outlook on our next earnings call. You can see in the appendix a chart that tracks our performance against the 35% greenhouse gas intensity reduction goal we announced in February. With a 19% reduction to date versus our 2018 baseline year, we are clearly well on our way towards achieving our goal. With us on the call today is Sanjeev Lamba, who we recently announced as our new Chief Operating Officer. A little bit about Sanjeev. He has spent his entire career in industrial gases, beginning with BOC, then Lindy AG, and upon our merger, Lindy PLC. It is fair to say he has survived and thrived in three different administrations and two major integrations. He is deeply knowledgeable of all three modes of industrial gas supply, onsite merchant and packaged gases, and has been a strong advocate for our strategy of building network density and core geographies. Under his leadership, APAC has improved operating margins over 500 basis points over the last two years, driven by cost efficiencies, good price management, and the rollout of digitalization initiatives. The integration between Legacy Praxair and Lendi AG in Asia was completed ahead of scheduled and generated substantial benefits for the company. Another indication of the success of the merger and Sanjeev's leadership is our employee survey results, which were quite positive across the entire Asia population. On the project side, 70% of our cellar gas backlog today is in Asia, and many of those projects were won as a result of Sanjeev's leadership. In terms of clean energy, Sanjeev has been a strong advocate. We have more project activity in Asia today than any other part of the world. And I expect Asia to be the region where we first see meaningful results. Sanjeev has been a staunch supporter of all our corporate values, safety, integrity, diversity, community, and sustainability. And I expect him to continue to work diligently to improve our performance in all of these areas. As you saw in the announcement, Sanjeev will be responsible for the Americas, APAC, and EMEA regional operating segments, as well as Lindy Engineering, LindCare, and global functions. And he will relocate to Danbury, Connecticut. With that, I will turn it over to Sanjeev to say a few words.