Linde plc

Good day, and thank you for standing by. Welcome to the Lindy First Quarter 2023 Earnings Teleconference and Webcast. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. And after the speaker's presentation, there will be a question and answer session. I'd now like to hand the conference over to Mr. Juan Pelayas, Head of Investor Relations. Please go ahead, sir.

Chris, thank you. Good morning, everyone, and thanks for attending our 2023 first quarter earnings call and webcast. I'm 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 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 will provide some opening remarks, and then Matt will give an update on Linde's first 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 a very good morning, everyone. We had a strong start to the year as Linde employees once again delivered on their commitments, irrespective of the geopolitical and economic headwinds. Learnings per share, operating margin and return on capital all reach new record highs. Robust pricing coupled with dependable return on capital have more than compensated for a weaker economy. Just like the last four years, Lynda's ability to consistently deliver earnings growth in any environment is a testament to the resilient portfolio, operating excellence and capital discipline. And when global economies recover, which they always do, there's an opportunity to further leverage the base volume growth, just as we've demonstrated in 2021. However, during uncertain times like today, we continue to execute our strategy of optimizing our base business every day, capitalizing on growth projects, including high-quality clean energy projects. All of this while maintaining our industrial gases model, coupled with a disciplined approach to capital allocation. Slide three provides a brief update on clean energy, including key projects that are both under construction and an example of a project being developed. Let me begin by reiterating our strategy with respect to clean energy. And you'll notice it hasn't changed over the last three years, which it shouldn't. Let's start with the first principle. We will stick to the core of industrial gases model. This has been a cornerstone of our strategy for decades. We are experts at designing, building, operating, and distributing industrial gases and equipment. We serve many markets where our customers are experts at what they do. Making our customers more productive and competitive through our core strengths is what makes Lindy successful. This has been true for the last 100 years. and I expect it will continue to be true for the next 100. Another certainty within our industry is how customers demand the same three requirements for the gas supply, which are safety, reliability, and lowest total cost of ownership. This holds irrespective of the molecule, the end market, or supply mold. This is why a key element of our strategy is to leverage our world-class engineering capabilities, and existing asset network of our $3 billion hydrogen business to deliver the most reliable and lowest-cost supply systems for our customers. Following these principles, we've successfully won and advanced many clean energy projects, of which I'd like to highlight just a few. The left side represents projects currently under construction. These are projects with executed contracts, fixed payments, and incremental growth with predictable returns. With project capex of just under $2 billion, including the new OCI project in Texas, Valendi will supply nitrogen and clean hydrogen by capturing CO2 for underground sequestration through our partner ExxonMobil. Currently, this project makes up the majority of clean energy projects in our backlog since most electrolyzer investments are designated for the merchant market and therefore considered base capex. There are a few projects like the recently announced Evonik agreement that meet backlog criteria. But even here, we support local network and supply high purity clean hydrogen to electronics and other industrial customers as well. Currently, we view these electrolysis electrolyzer projects as modules in our local supply network for supply of merchant hydrogen. They're often integrated into our existing hydrogen network, sometimes side by side, leveraging the same storage and transportation infrastructure, helping optimize distribution costs. Furthermore, these projects leverage various electrolyzer technologies, including PEM and alkaline. provide the best fit to customer needs sale of plant is another avenue for lindy to participate in growth opportunities which may have different customer demands or which may not benefit from integration with our existing supply network now in addition to these projects being constructed we have over 200 different projects under development of course The probability of these projects being approved or won by us varies from project to project. On the right side of the slide, I'd like to highlight one such opportunity, which was recently made public by our customer. Dow recently announced that it has selected Lindy as its industrial gas partner for supply of clean hydrogen and nitrogen for its proposed net zero carbon emissions integrated ethylene cracker site in Alberta, Canada. Under the framework agreement, Linde will complete the design and engineering for a Linde-owned and operated world-scale air separation, autothermal reformer, and carbon capture complex. This complex will potentially be integrated with Linde's existing operations in Alberta. Engineering work is underway, and both companies are working to obtain their respective board approvals and regulatory approvals. Final investment decision is anticipated by end of the year, so I don't really have many additional details until then. We continue to work on a number of other projects aligned with our strategy to decarbonize our own operations, help customers decarbonize their operations, such as the Dow project above, and address new market needs, such as the OCI project. Overall, the total opportunities are likely to exceed $50 billion over the next decade, representing one of the best long-term growth environments I've seen in a long time. Of course, time will tell how many we ultimately sign and announce, but you can see we are making meaningful progress. And despite the many differences across these projects, our full suite of offerings coupled with a strong balance sheet will enable us to win more than our fair share. But rest assured, our participation will consistently follow our strategy and proven investment criteria. I'll now turn the call over to Matt to walk you through the financial numbers.