Gases Division

In the Gases Division, Linde generated revenue in the 2015 financial year of EUR 15.168 bn, an increase of 8.5 percent when compared with the figure for the prior year period (2014: EUR 13.982 bn). On a comparable basis, after adjusting for exchange rate effects and changes in the price of natural gas, Linde would have achieved an increase in revenue of 2.1 percent. After making an additional adjustment of EUR 86 m, which is the contribution to revenue made by the LPG business acquired by Linde during the reporting period from Wesfarmers Kleenheat Gas Pty Ltd, the increase in revenue was 1.5 percent. Revenue has been adversely affected not only by the prevailing weak economic environment, but also by current low energy costs and the expiry of on-site contracts.

Operating profit in the Gases Division rose by 8.2 percent in the period under review to EUR 4.151 bn (2014: EUR 3.835 bn). The operating margin remained stable at 27.4 percent (2014: 27.4 percent).

Capital expenditure in the Gases Division in the 2015 financial year was EUR 1.881 bn (2014: EUR 1.890 bn). Most of this investment was in large-scale projects in the on-site and liquefied gases product areas.

Varying business trends were to be seen in the individual segments in the Gases Division, depending on prevailing economic conditions.

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EMEA (Europe, Middle East, Africa)

In EMEA, Linde’s largest sales market, the Group generated revenue of EUR 6.010 bn in the 2015 financial year, which was slightly higher than the figure achieved in the previous year (2014: EUR 5.980 bn). On a comparable basis, revenue fell by 1.2 percent. When comparing with the revenue generated in 2014, it should be noted that at the end of 2014 Linde transferred a large hydrogen plant in Italy to the customer on expiry of the contract. Since then, no revenue has been generated with that plant. The operating profit came to EUR 1.790 bn and was negatively affected by impairment losses on receivables of EUR 22 m that had to be recognised in the third quarter of 2015 due to the insolvency of a customer in the UK. Compared with the prior-year value, the operating profit increased slightly by 0.7 percent (2014: EUR 1.778 bn). The operating margin was 29.8 percent (2014: 29.7 percent).

Different business trends were to be seen in the product areas of the various sub-regions of the EMEA segment.

The on-site business, where Linde supplies gases on site to major customers, was affected by declining volumes, particularly as a result of the expiry of the on-site contract in Italy. Linde was nevertheless able to achieve revenue growth in this product area, especially in the Middle East & Eastern Europe. Against the prevailing backdrop of modest economic growth in Europe and South Africa, revenue in the liquefied gases business was down on the prior-year period. The cylinder gas product area also continued to see relatively modest trends. Revenue in both these product areas is being adversely affected by current low energy costs, especially in the LPG business. In its Healthcare business, Linde achieved growth in virtually all regions.

Business performance in the EMEA segment was supported by the start-up of new plants. In January, for example, a new air separation plant went into production in Sweden as scheduled. Under an on-site agreement, the plant supplies the customer Perstorp with 18,300 standard cubic metres of oxygen per hour in Stenungsund. The investment made was around EUR 40 m.

At the beginning of 2015, Linde also signed a contract in Sweden to build a hydrogen filling station at Arlanda Airport. Construction was completed on schedule in the third quarter of 2015.

In addition, in March 2015, a hydrogen filling station for hydrogen-powered buses was opened in Aberdeen in Scotland. The contract forms part of the HyTrEc (Hydrogen Transport Economy) project, which aims to improve access to the use of hydrogen as an alternative source of energy in the North Sea region. The hydrogen filling station is operated by Linde.

Linde is a pioneer in the development of hydrogen technology and is continuing to drive forward the establishment of a hydrogen filling station infrastructure for fuel-cell vehicles. The Group is working together with Daimler on plans to build 20 hydrogen filling stations in Germany. This project is part of the H2 Mobility Initiative, a joint initiative set up by Linde and five other partners. The aim is to build a total of 400 hydrogen filling stations in Germany by 2023.

In Port Elizabeth, South Africa, the Group successfully brought an air separation plant on stream in the second quarter of 2015. The plant produces 150 tonnes of liquefied gases per day and supplies industrial gases and medical gases to customers in the Eastern Cape region. The investment made was around EUR 23 m.

A CO2 purification and liquefaction plant started production in Denizli, Turkey, in the second quarter of 2015. The plant purifies and liquefies 240 tonnes of CO2 per day and supplies liquefied CO2 to customers in the region in the food industry. At the same time, Linde signed a long-term supply agreement for raw CO2 with Zorlu Energy, one of the largest energy companies in Turkey.

In June 2015, an air separation plant came on stream in Trinec in the Czech Republic. This plant supplies 34,000 standard cubic metres of liquefied oxygen and 34,500 standard cubic metres of liquefied nitrogen per hour to steel producer Trinecke Železarny, based on the renewal of an existing long-term supply contract. The total investment was around EUR 62 m.

In the third quarter of 2015, an air separation plant started production on the Kryvyi Rih site in Ukraine, supplying gaseous oxygen and nitrogen to ArcelorMittal, the worlds largest steel producer. The plant has a capacity of 34,500 standard cubic metres of oxygen and 25,200 standard cubic metres of nitrogen per hour and also supplies liquefied gases to the regional market. The investment made was around EUR 60 m.

At the Hamburg-Harburg refinery site, a hydrogen system erected by Linde for Nynas AB, one of the world leaders in naphthenic specialty oils (NSPs) and bitumen, started operations in the fourth quarter as planned. Linde will use the system to supply Nynas with approx. 400,000 m3 of hydrogen a day. The Linde Engineering Division erected a steam reformer for this purpose, which is operated by the Gases Division as part of a long-term on-site contract. Investment in the project came to around EUR 30 m.

The project forms part of the extensive overhaul of the refinery in Hamburg-Harburg, which has been developed as a specialised production site for naphthenic specialty oils. Nynas’ total production capacity for NSPs has increased significantly as a result. These specialty oils are used, among other things, in tire manufacture, transformers, printing ink, industrial rubber and lubricants.

Analysis of revenue by segment in %
Analysis of revenue by segment (Pie chart)

In the fourth quarter of the year, Linde concluded a long-term supply agreement with the customer CP Kelco. Linde will use an ECOVAR plant to supply the company from the paper and pulp industry with 1,100 standard cubic metres of nitrogen an hour in Äänekoski (Finland) from 2016 onwards.

Linde has also concluded a long-term gas supply agreement on the supply of 5,100 standard cubic metres of oxygen an hour with the customer Metsä Fibre, which is based in the same location. The plant, which will be one of the world’s largest oxygen producers using what is known as Vacuum Pressure Swing Adsorption (VPSA) technology, is scheduled to be commissioned in the third quarter of 2017. Both ECOVAR plants will be built by Linde’s Engineering Division.

In Dammam (Saudi Arabia), Linde brought an air separation plant for the liquefied gases market on stream in the 2015 financial year. The plant has a capacity of 165,000 tonnes of liquefied nitrogen and oxygen per day and was built by the Engineering Division. The investment volume was around EUR 26 m.

Linde also opened an acetylene plant in the UK in October 2015. The plant, which was associated with an investment volume of around EUR 45 m, underscores Linde’s long-term commitment to the manufacturing industry in the UK and Ireland.


Business trends in the Asia/Pacific segment were again supported principally by positive exchange rate effects. Linde generated revenue of EUR 4.157 bn in the 2015 financial year, up by 9.1 percent in a year-on-year comparison (2014: EUR 3.812 bn). The comparable revenue growth came in at 1.0 percent. Growth here was underpinned by the contribution to revenue of EUR 86 m made by the LPG business of Wesfarmers Kleenheat Gas Pty Ltd, which Linde acquired in February. If an adjustment were also to be made for this effect, revenue would be 1.0 percent below the figure for the prior-year period. Operating profit rose by 5.2 percent to EUR 1.063 bn (2014: EUR 1.010 bn), giving an operating margin of 25.6 percent (2014: 26.5 percent). The margin reported in 2014 reflected the positive effect of profits from the disposal of non-current assets.

Within the Asia/Pacific segment, the greatest increases in revenue were to be seen in the on-site business in China and India. Revenue generated by the cylinder gas product area was below that achieved in the prior-year period. The liquefied gases business saw quite positive trends in this segment. In both product areas, low energy costs and lower LPG prices had the effect of depressing revenue.

In India, Linde has erected its first location for the filling of cylinders for the healthcare segment in Siliguri, located in the east of the country. Investments were made in cryogenic liquid hydrogen storage facilities, state-of-the-art facilities for the filling of cylinders and a local laboratory. India’s healthcare sector is one of the fastest growing sectors of the country’s economy and the establishment of this location represents a key milestone in the Company’s efforts to expand its healthcare business in smaller developing towns and cities across India.

In the South Pacific, the prevailing weak economic environment in manufacturing industry and declining investment in the mining industry had an adverse impact on growth. In the LPG business which is vital to Australia, lower oil prices hampered revenue growth, as the price reductions were passed on to the customers. Moreover, the expiry of on-site contracts led to reductions in revenue in this region too. In response, structural and organisational measures already undertaken as part of the Customer Focus Initiative are expected to reduce costs and support profitability in this region.

In the first quarter of 2015, an air separation plant went on stream in Quanzhou, China, which supplies gases to Fujian Refining & Petrochemical. The plant is operated by Fujian Linde-FPCL Gases Company Limited, a joint venture between SINOPEC Fujian Petrochemical Company Limited and Linde. The profit generated by this plant is included in the share of profit or loss from associates and joint ventures (at equity) in the Group’s statement of profit or loss.

In April 2015, Linde also successfully brought another air separation plant on stream in China. This plant has a capacity of 87,500 standard cubic metres of liquefied oxygen and 10,000 standard cubic metres of liquefied nitrogen per hour and will supply customers in the Tianjin region. The amount of the investment was around EUR 27 m.

During the third quarter, Linde brought on stream an air separation plant in Taiwan on schedule. The plant supplies nitrogen to customers in the semiconductor industry in Hsinchu Science Park. The amount of the investment was around EUR 28 m.

As a result of renewing existing supply contracts with power-plant operator Seetec and with Samsung Total Petrochemicals Co., Ltd. (STC) in the Seosan petrochemical cluster in South Korea, Linde has been able to expand its capacity on this site. During the reporting period, another air separation plant was successfully brought on stream here. The plant produces oxygen and nitrogen and also supplies products for the regional market. The amount of the investment was around EUR 62 m.

In November 2015, Linde announced that it would be erecting an air separation plant worth just under EUR 15 m in Rupganj (Bangladesh). The plant, which is the biggest of its kind in Bangladesh, is expected to produce 100 tonnes of liquefied gases per day. It will supply several customers from various different sectors of industry from 2018 onwards. There are also plans to construct a filling station for cylinder gases in the same location.

Positive impetus also came from Singapore in the reporting period. Here, Linde was able to expand its business relationship with the chemicals company Celanese.


In the Americas segment, revenue increased significantly period under review by 20.1 percent to EUR 5.183 bn (2014: EUR 4.314 bn). On a comparable basis, revenue rose by 7.7 percent. When compared with the prior-year period, operating profit increased by 24.0 percent to EUR 1.298 bn (2014: EUR 1.047 bn). The operating margin rose to 25.0 percent (2014: 24.3 percent). Within this context, it is important to bear in mind that the prices for feedstock such as natural gas that are passed on to customers fell in 2015 in a year-on-year comparison, which had a positive impact on the operating margin.

In the healthcare business, Linde was able to achieve significant growth in revenue in North America as a result of the rise in the number of patients requiring care and new products.

In the fourth quarter, Linde signed an agreement on the takeover of the company American HomePatient, Inc., which specialises in respiratory therapy. After all of the necessary permits were obtained, the acquisition was completed with effect from 31 January 2016. The company has 220 branches in 38 federal states and operates primarily in the east of the US. In the last financial year, American HomePatient generated revenue of around EUR 260 m with a good 2,700 employees. Given the growing number of patients requiring care and the associated synergy effects, the acquisition is expected to help counteract the negative effects likely to come as a result of state price cuts for services in the US Healthcare business over the next few years. Linde is also making ongoing adjustments to its cost structure and continues to pursue a strategy of organic growth.

The business with liquefied gases and cylinder gas in North America showed very positive development, mainly thanks to the market for electronic and specialty gases.

On the major petrochemical site at La Porte, Texas, in the United States, Linde brought on stream during the reporting period a large air separation plant and a new gasification train for its existing synthesis gas complex. Linde has invested a total of more than USD 200 m in this project. The new air separation plant is the largest plant of its type operated by Linde in the United States. Together with the new gasification unit, it will also comprise the largest complex in the world for the production and subsequent processing of synthesis gas to be based on natural gas. In the Houston area, Linde therefore has a fully-integrated site for the production of air gases and syngas products. The liquefied gases oxygen, nitrogen and argon also produced by the plant will serve to supply the fast-growing regional market in the area around the Houston Ship Channel. The expansion project will ensure that Linde is able to provide long-term security of supply to its petrochemical customers in La Porte.

A hydrogen plant was brought on stream as scheduled in Charleston, Tennessee (US) during the period under review. Under a long-term on-site agreement, the plant will suppy the customer Wacker with 2,040 normal cubic metres of hydrogen per hour. The amount of the investment was around EUR 20 m.

In Mexico, Linde successfully extended the contract for the supply of nitrogen with its long-standing customer PEMEX – the state crude oil group – until 2027 in the period under review. Linde supplies the customer with 1,500 million normal cubic metres of nitrogen a day from a total of five air separation plants. The nitrogen generated by the plants in Mexico is transported to the Gulf of Mexico via a pipeline, where it is pressed at high pressure into the Cantarell oil field as a safe way of increasing output. Cantarell is one of the largest offshore oil fields in the world and is also Mexico’s main supplier of crude oil.

Business trends in the individual countries in South America have continued to be modest in 2015. The economic situation in the region is characterised by high inflation and low growth rates. This environment is also slowing Linde’s business performance in the region. Nevertheless, Linde has been able to achieve slight growth on a comparable basis in all of its product areas. The cylinder gas business in Brazil has however seen a downward trend.

Product areas

As explained in the comments on the segments, each product area contributed to a different extent to the business performance of the Gases Division.

In the Healthcare business, Linde increased revenue in the 2015 financial year on a comparable basis by 7.4 percent to EUR 3.665 bn (2014: EUR 3.412 bn) and thus achieved the largest growth in this division. The homecare business developed particularly well in the Americas segment.

In the on-site product area, revenue fell on a comparable basis by 0.6 percent to EUR 3.847 bn (2014: EUR 3.872 bn). After adjusting for the non-recurring effects of the expiry of contracts, revenue in this product area was 2.1 percent higher than the figure achieved in the prior year.

Trends in the liquefied gases business were relatively steady. Revenue here increased slightly by 1.7 percent to EUR 3.616 bn (2014: EUR 3.555 bn).

In the cylinder gas product area, revenue on a comparable basis was EUR 4.040 bn, which was 0.4 percent above the figure for the previous year (2014: EUR 4.023 bn). It should be noted here that current low energy prices have depressed revenue from liquefied gases and cylinder gas, especially in the LPG business. In these two product areas, the acquisition of the LPG business from Wesfarmers Kleenheat Gas Pty Ltd had a positive impact. The discontinuation of carbon tax in Australia had an adverse impact on cylinder gas revenue, as the cost of this levy had until now been passed on to the customer.

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Gases Division: Revenue by product area








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Gases Division