Linde plc

Good day, and thank you for standing by. Welcome to the second quarter 2021 Lindy's Earnings 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 and then one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star and then zero. I would now like to hand the conference over to your speaker today, Mr. Juan Perez, Head of Investor Relations. Please go ahead.

Crystal, thank you. Good morning, everyone, and thanks for attending our 2021 Second Quarter Earnings Call and Webcast. I am Humphrey Dyes, Head of Investor Relations, and I'm joined this morning by 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 Investor 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 to this presentation. Sanjeev and Matt will now give an update on Lindy's business outlook and second quarter performance, and then we'll be available to answer questions. Let me turn the call over to Sanjeev.

Thanks, Juan, and good morning, everyone. Lindy employees once again produced stellar results in the second quarter, achieving multiple new records, including a 24.2% operating margin, a $2.7 earnings per share, and 15.7% return on capital. Volumes grew 15%, pricing increased 3%, along with global weighted inflation. And we continue to optimize the business through many productivity initiatives. I'm really proud of how the Lynda team delivered industry-leading performance despite the many challenges we constantly face. And I expect to continue this performance for many years to come. Last quarter, I presented to you the LIMDA strategy, which outlined the levers that we use to grow EPS, more than 10% per year. Given the results so far, I think it's safe to say we're well on our track. That said, I believe it's also important to have a clear path to future revenue expansions. which I'd like to discuss on the next slide. So on slide three, you'll see that when previously I had highlighted to you that Linde has a unique advantage of being able to offer its customers a sale of gas or a sale of plant option. Our engineering capabilities are a clear competitive advantage, allowing us to participate in almost every type of growth opportunity while maintaining our investment criteria. Going forward, we are therefore going to present the sale of gas and sale of plant backlog combined. This quarter, our total project backlog stands at approximately $7.5 billion, representing contractual growth with high-quality customers and secured cash flows. Now, in addition to this project backlog, in parallel, we also invest around $1 billion per year on base business growth opportunities. These are great opportunities to deliver high-quality, long-term growth, but they are either under $5 million in spend or don't contain contractual, fixed-free elements for secured, incremental growth. Base growth projects typically also have shorter execution times, are margin-creative, and support a network density strategy. Some examples include the clean energy projects we announced earlier this year, the hydrogen liquefier in the U.S. Gulf Coast that we recently started up, and of course, more than 25 small onsite projects that we have already run this year. We serve glass, bulk and paper, mining, and other growing end markets with these small onsites. In addition, the business continues to leverage a dense network with winning new merchant and packaged accounts, which further enhances the quality of our business. As stated, we currently have approximately $7.5 billion of contractually secured growth projects, which we'll execute over the next three to four years, plus $1 billion per year of incremental base growth capex. The revenue expansion from these investments exclude organic growth already being captured from our existing dense supply network across a diverse spectrum of end markets. Of course, we've well demonstrated how we leverage this through the current economic recovery that you're seeing. As I sit here today, we are currently reviewing a pipeline of hundreds of prospective projects not included in this backlog, which easily represent more than $10 billion of potential investment opportunities, including a significant number of electronics and clean energy projects and, of course, sale of plant projects. Both sale of gas and sale of plants are great ways for us to grow while maintaining our investment discipline. Given our strong execution capability, I remain bullish on Linda's outlook and growth prospects. Regardless of what happens with inflation or macroeconomic trends or the pace of secular growth drivers, we have a proven business model that can generate compound value growth for our shareholders today and decades into the future. Now, before I hand over to Matt, I want to make a comment on our ESG goals. I mentioned to you in last quarter's call that we are developing new ambitious ESG goals. which we expected to share in the near future. We've been diligently working with our business leaders around the world to determine these targets, and more importantly, to incorporate them in our operating rhythm. Based on that progress, I expect to disclose these new ESG goals before the end of the year. I'll hand over now to Matt, who will take you through the financial results and guidance. Matt. Thanks, Sanjeev.