Linde plc

Good morning, everyone, and thank you for attending our 2024 third quarter earnings call and webcast. I'm Juan Pelaez, head of investor relations, and I'm joined this morning by Sanjeev Mamba, 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 these 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 the Q&A. Let me now turn the call over to Sanjeev.

Thanks, Juan, and good morning, everyone. Third quarter results once again demonstrated the resilience and resolve of Lindy employees across the globe. EPS, ROC, and operating margins reached new highs despite challenging economic conditions in most countries. But frankly, none of this came as a surprise. Some of you may recall that we anticipated sluggish industrial activity this quarter, and it played out as expected. Looking ahead, I have concerns regarding continued economic weakness. So we've taken a series of proactive actions, including targeted cost reductions. Matt will provide more details on this charge. but it affects approximately 2% of the workforce globally and is expected to be mostly completed in the next few months. In light of these actions, it may be helpful to provide you additional color on the end market trends, which you can find on slide three. Industrial-related end markets have declined 1% to 2% sequentially from the second quarter. This trend is consistent with our prior comments. as well as the industrial-related macroeconomic statistics. However, we did experience some positive growth over prior year, including in North America, which had almost 40% of global sales continues to be a bright spot. On-site and merchant volumes are slightly up in the U.S. In addition, North American project activity continues to progress. This said, these positive trends contrast with most of EMEA and parts of APAC, primarily China. The combination of geopolitical tension and economic uncertainty has suppressed large-ticket purchases, which tend to correlate with industrial markets such as steel, glass, and chemicals. Currently, we don't see any meaningful catalyst to reverse this trend for the remainder of this year, and thus have embedded this view in our guidance. We believe this is the most prudent position to take at this time. Conversely, consumer-related end markets are slightly positive versus second quarter, with continued growth in food and beverage and stability in healthcare. Electronics was up a high single digit over previous year. As expected, recovery in electronics continues to move forward, but at a lower clip. While recovery is slow, we fully expect electronics to provide sequential growth in the next quarter. including project backlog ramp-ups. Taken together, these trends point to a stagnant or slightly declining economic backdrop. However, the combination of actions on pricing, productivity, and costs combined with contractually secured project backlog and robust stock repurchases continue to support our ability to deliver shareholder value regardless of the challenges. In fact, our backlog in the third quarter hit $10 billion as we signed our largest sale of gas project in company history. This contract with Dow Chemical is a testament to our disciplined investment approach to pursue and win projects in our core competence of reliable and cost-effective industrial gas supply. Slide 4 provides more details on this $2 billion-plus investment for Lindy. Dow is embarking on an ambitious project to achieve net zero scope one and two carbon emissions in their Alberta, Canada complex through a series of initiatives, including fuel switching from natural gas to low carbon, or otherwise known as blue hydrogen. We're proud to be selected as the industrial gas partner to provide atmospheric gases, low carbon hydrogen, and services for both CO2 capture and off-gas cleanup. For phase one, Linde's total investment is expected to be over $2 billion, underpinned by a traditional over-the-fence gas supply contract that aligns with our investment criteria. We expect this project to start up in late 2028. I think it's important to note the size and scope we are undertaking. It's more than just low-carbon hydrogen production. The clean energy transition will draw upon several different Linde capabilities. expertise, and product offerings since integrated gas management solutions are in greater demand. In addition to supplying Dow, this investment will enhance our existing footprint and provide substantial density for future extensions. In fact, we're already in conversations with future potential customers. All in, this project aligns well with our core strategy to pursue traditional industrial gas contracts. with high-quality customers in key geographic regions of industrial density. Overall, we see a challenging economic future, but are well-prepared. Lindy is heading into this uncertainty with the largest sale of gas backlog in company history, an incredibly strong balance sheet, and a lean and well-focused workforce, with a proven track record in successfully navigating difficult conditions time after time. And while I may not be bullish on the global economy, I've never been more confident in Lindy's ability to sustain industry-leading results while rewarding our owners. I'll now turn the call over to Matt to walk through our financial results.

Thanks, Sanjeev. Third quarter results can be found on slide five.