OREANDA-NEWS. The technology company The Linde Group achieved a slight increase in Group revenue in the first quarter of 2014 when compared with the first quarter of 2013. Group operating profit was not quite as high as the figure achieved in the prior-year quarter. "We have made a rather modest start to the new financial year," said Professor Dr Wolfgang Reitzle, Chief Executive Officer of Linde AG. "Economic growth is still anything but strong. Exchange rate effects also continued to have an adverse impact on our business performance."

Linde believes that it is still on track for the full year 2014 and confirms its previous outlook: "After adjusting for exchange rate effects, we expect to achieve solid growth in revenue and a moderate improvement in Group operating profit in the current financial year," declared CEO Reitzle.

On the basis of its robust business model geared towards sustainability and its globally balanced position, Linde is also well-equipped for the medium and long term. For the 2016 financial year, the Group is still seeking to achieve Group operating profit of at least EUR 5 bn and a return on capital employed of around 13 percent (reported ROCE) or around 14 percent (adjusted ROCE). These medium-term targets were founded on the assumption that there would not be any significant shifts in exchange rates compared with those prevailing at 31 December 2012 when the medium-term outlook was formulated. Since then, there have been significant changes in exchange rates which have not been favourable to Linde. If exchange rates over the coming years are as unfavourable as they have been recently, this would reduce Group operating profit in 2016 by around EUR 400 m and might also have an adverse impact on return on capital employed.

In the first quarter of 2014, Linde achieved a slight increase in Group revenue of 1.5 percent to EUR 4.045 bn, when compared to the figure for the first quarter of 2013 of EUR 3.985 bn. Exchange rate effects significantly slowed growth. After adjusting for these effects (which equate to revenue of EUR 215 m), the increase in revenue was 7.3 percent.

Linde generated Group operating profit of EUR 927 m in the three months to 31 March 2014, which was not quite as high as the figure achieved in the prior-year quarter of EUR 953 m. Adverse currency fluctuations also had an impact here. The effect of these distortions was to reduce earnings by EUR 51 m. Without the distortions, Linde would have achieved a 2.8 percent increase in Group operating profit. The operating margin was 22.9 percent (2013: 23.9 percent). It should be noted here that the Engineering Division contributed significantly more to Group revenue in the first quarter of 2014 than was the case in the first quarter of 2013. This business has a lower margin than that achieved by the Gases Division.

Linde generated earnings before tax (EBT) in the first quarter of 2014 of EUR 422 m (2013: EUR 433 m). Profit for the period was EUR 321 m (2013: EUR 340 m). Profit for the period attributable to Linde AG shareholders was EUR 290 m (2013: EUR 318 m). This gives earnings per share of EUR 1.56 (2013: EUR 1.72).

Cash flow from operating activities saw a very positive trend in the reporting period, increasing by 13.8 percent to EUR 594 m (2013: EUR 522 m). This substantial increase was due mainly to more efficient working capital management.