Linde plc

Thanks, Cecilia. Good morning, everyone, and thank you again for attending our 2022 Third Quarter Earnings Call and Webcast. I am Juan Pelaez, Head of Investor Relations.

And I'm joined this morning by Sanjeev Lamba, 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 disclosures on page two of the slides and note that it applies to all statements made during this teleconference. The reconsiderations of the adjusted numbers are in the appendix to this presentation. Sanjeev will provide some opening remarks, and then Matt will give an update on Lindy's third quarter financial performance and outlook. after which we will wrap up with Q&A. Let me now turn the call over to Sanjeev.

Thanks, Juan, and good morning, everyone. Lynda employees once again delivered a strong quarter despite the economic challenges. EPS increased 21% excluding FX, while operating margins expanded 90 basis points when adjusting for contractual cost pass-through, all underpinned by $2.6 billion of operating cash flow. and a record ROC of 21.8%. Now, in addition to achieving this financial performance, the company recently received approval for its absolute emission reduction targets by the Science-Based Targets Initiative, confirming our roadmap to help decarbonize the planet. I'm pleased to see these results, which are truly a testament to the quality of our team and our relentless execution culture. These financial results highlight both the resilience and growth capabilities of the business in any environment. In times like these, it's important to remind investors of our stable and diversified growth trends, which you can find on slide three. We continue to experience robust underlying sales growth this quarter, with each business segment growing double-digit versus last year. Resilient end markets, which make up about one-third of sales, are collectively growing double-digit percent, with food, beverage, and electronics up almost 20%, and healthcare slightly down from prior year pandemic volumes. Our gases are critical for the production and packaging of everyday consumer items, such as food, carbonated beverages, respiratory applications, and electronic components. These volumes track to broad consumption levels rather than specific technologies or trends, so they are quite stable even during volatile economic periods. Furthermore, despite what you may be reading in the news, we continue to see healthy supplies of gases into electronics fabs in every region. In fact, our total electronics project backlog increased to 1.4 billion after recently being awarded a second large sale of gas contract for a major semiconductor manufacturer in the U.S. The bottom half of the table provides the trends for the most cyclical end markets. And similar to electronics, these trends probably don't align with what you're hearing and reading. Recall that a significant portion of these sales are underpinned by fixed payment structures independent of customer volumes, including on-site fees and cylinder rentals. It's important to note that we spend a lot of time on contract language to ensure our returns are protected and forced measure clauses are absolutely clear. I won't speak for the industry, but I have confidence in the strength of lender contracts. We've demonstrated this through countless regional and global challenges. including the most recent pandemic, and so I don't see today being any different. In addition, a large portion of our customers represent the most competitive in their markets with assets that tend to be the last ones running. A disciplined, long-term approach to capital allocation continues to be validated during these challenging times. At almost 60% of sales, The cyclical end markets are also up double-digit percent. While growth is broad-based, we continue to see strength in mining for battery materials, merchant hydrogen sales, aerospace, including commercial space, and general manufacturing, especially in Americas. In fact, the U.S. continues to be our best growth market as a combination of natural resource security, consumer resiliency, and a strong dollar to support further economic expansion. This is especially true for the Gulf Coast, which is experiencing one of the highest investment activity in quite some time, driven by lower-cost energy and the ability to economically decarbonize with the passage of the U.S. Inflation Reduction Act, or IRA, which you can find on the next slide, four. The IRA has accelerated significant growth prospects from our unrivaled hydrogen and atmospheric gas network, as well as potential new markets being developed across the U.S. To this effect, we've grouped these activities into three different categories of decarbonized lender, decarbonized customers, and new markets. Let me start with decarbonized lenders. which represents the ability to sequester existing CO2 emissions generated from our own hydrogen production. This provides simultaneous benefits. The production and supply of blue hydrogen into our network and the reduction of Scope 1 emissions per our stated sustainability goals. The potential investment to decarbonize and linder exceeds $3 billion while considering our existing hydrogen production asset base. The second category of decarbonized customers represents two separate opportunities. The first, to enable our customers to decarbonize their processes through fuel switching. That is by using low carbon intensity hydrogen as fuel in their refineries, crackers, or furnaces. The second opportunity is our ability to capture and sequester existing carbon emissions from customers currently connected to a pipeline network, especially in the Gulf Coast. This will be a revenue model similar to our current on-site business, and customers would benefit by decarbonizing their own operations in addition to monetizing tax credits over the contract period. Together, a potential investment in this category could easily exceed $10 billion, which I view to be on an accelerated path given the incremental IRA benefits and the strength of Linda's existing network and asset base to support it. The third category of new markets represents greenfield opportunities that are starting to materialize with the signing of the IRA, and I expect to announce some new project wins very soon. These two will be similar to our current on-site business, with fixed payment contracts and stable returns. We estimate more than $20 billion of potential investment, with some of the larger ones related to blue and green hydrogen and blue ammonia. Regardless of which projects are pursued, we plan to follow a few overarching principles. The first We intend to partner with subsurface experts for all underground operations. We at Linde are not geologists. Second, all projects will follow our investment criteria. In other words, earn a commensurate return for the risk undertaken. Third, we will stick to our core, which is management of industrial gases. We have no interest to own or speculate on globally traded chemicals. Rather, we have off-takers for our products. Finally, it's important to understand the nature of the tax credits in the IRA. While the first five years are direct pay, essentially like grants, years 6 through 12 are tax credits that must be used against our U.S. tax liability up to a cap. Therefore, it's important for us to have an understanding on the monetization of these tax credits as we develop these projects, whether used by Linda or sold to a third party. Of course, we won't speculate on the market value of excess tax credits over the next decade. The IRA has accelerated the U.S. clean energy transition, and from what we are seeing today, the total investment opportunity for Linda in the U.S. alone exceeds $30 billion over the next decade. Overall, I'm very bullish on the clean energy opportunities in front of us, and I expect to announce meaningful projects in the near term. This secular growth driver, coupled with our operating discipline and relentless focus on pricing and productivity within our base business, is what gives me the confidence in our ability to keep delivering 10-plus percent EPS growth over the next several years. I'll now turn the call over to Matt to walk you through the financial numbers.