Asset Structure Analysis
Linde plc’s total assets were $80.81 billion as of December 31, 2023, up from $79.66 billion as of December 31, 2022.
Property, plant and equipment, net were $24.55 billion at December 31, 2023, accounting for 30.4% of total assets.
Goodwill was $26.75 billion as of December 31, 2023, constituting 33.1% of total assets.
Other intangible assets, net were $12.4 billion as of December 31, 2023, composing 15.34% of total assets.
Total current assets were $12.62 billion as of December 31, 2023, making up 15.6% of total assets.
Of total current assets, cash and cash equivalents were $4.66 billion, accounts receivable, net were $4.72 billion and inventories were $2.1 billion.
Liquidity and Solvency
Total current liabilities were $15.7 billion as of December 31, 2023.
The current ratio was about 0.8 for fiscal 2023.
Total liabilities were $39.7 billion as of December 31, 2023.
The debt ratio was 49.1% for fiscal 2023.
The point is Linde plc’s cash flow, which can support the company’s liquidity and solvency.
The company’s days sales outstanding were 51.6 days for fiscal 2023.
Linde plc’s days inventory outstanding were 43.2 days in fiscal 2023.
The company’s days payable outstanding were 62.6 days for fiscal 2023.
We want to say that Linde plc can get a lot of cash flow in operating activities, and net cash provided by operating activities were $9.3 billion, $8.86 billion and $9.7 billion in 2023, 2022 and 2021, respectively.
Profitability Analysis
Linde plc’s sales were $32.85 billion, $33.36 billion and $30.79 billion in 2023, 2022 and 2021, respectively.
Operating profit was $8 billion, $5.37 billion and $5 billion in 2023, 2022 and 2021, respectively.
The operating profit margin was 24.4%, 16.1% and 16.2% in 2023, 2022 and 2021, respectively.
Net income was $6.2 billion, $4.15 billion and $3.83 billion in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
net cash provided by operating activities were $9.3 billion, $8.86 billion and $9.7 billion in 2023, 2022 and 2021, respectively.
Capital expenditures were $3.8 billion, $3.2 billion and $3.1 billion in 2023, 2022 and 2021, respectively.
The free cash flow was $5.5 billion, $5.66 billion and $6.6 billion in 2023, 2022 and 2021, respectively.
Purchases of ordinary shares were $3.96 billion, $5.17 billion and $4.61 billion in 2023, 2022 and 2021, respectively.
Cash dividends were $2.48 billion, $2.34 billion and $2.2 billion in 2023, 2022 and 2021, respectively.
As you can see, cash returned to shareholders has been more than the amount of the free cash flow. From this perspective, the company is very generous.
Linde plc’s operating performance for Q1 2024
Linde plc’s sales were $8.1 billion in Q1 2024, slightly down from $8.19 billion in Q1 2023.
Conclusion
Linde plc’s cash flow is very strong, which can maintain the balance sheet.
The company’s profitability is rather good.
The weakness is that in the past three years, the company’s sales is in stagnating.
We reckon that the reasonable range of company’s valuation is $80 billion to $120 billion.
The $80 billion market capitalization is a very good buying point, we think.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Linde plc is a public limited company formed under the laws of Ireland with its principal offices in the United Kingdom and United States. Linde is the largest industrial gas company worldwide and is a major technological innovator in the industrial gases industry. Its primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, and rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene etc). The company also designs and builds equipment that produces industrial gases and offers customers a wide range of gas production and processing services such as olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants and other types of plants.
Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics.
