LINDE PLC

Linde’s operations consist of two major product lines: industrial gases and engineering. As further described in the following paragraph, Linde’s industrial gases operations are managed on a geographic basis, which represents three of the company's reportable segments - Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific); a fourth reportable segment, which represents the company's Engineering business, designs and manufactures equipment for air separation and other industrial gas applications specifically for end customers and is managed on a worldwide basis operating in all geographic segments. Other consists of corporate costs and a few smaller businesses which individually do not meet the quantitative thresholds for separate presentation.

The industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, acetylene). Many of these products are co-products of the same manufacturing process. Linde manufactures and distributes nearly all of its products and manages its customer relationships on a regional basis. Linde’s industrial gases are distributed to various end-markets within a regional segment through one of three basic distribution methods: on-site or tonnage; merchant or bulk; and packaged or cylinder gases. The distribution methods are generally integrated in order to best meet the customer’s needs and very few of its products can be economically transported outside of a region. Therefore, the distribution economics are specific to the various geographies in which the company operates and are consistent with how management assesses performance.

The company’s measure of profit/loss for segment reporting purposes is segment operating profit. Segment operating profit is defined as operating profit excluding purchase accounting impacts of the Linde AG merger, cost reduction program and other charges, and items not indicative of ongoing business trends. This is the manner in which the company’s Chief Operating Decision Maker ("CODM") assesses performance and allocates resources.

The table below presents sales and operating profit information about reportable segments and Other for the years ended December 31, 2024 and 2023.

Americas

The Americas segment includes Linde’s industrial gases operations in approximately 20 countries including the United States, Canada, Mexico and Brazil.

Sales

Sales for the Americas segment increased $138 million, or 1%, in 2024 versus 2023. Higher pricing contributed 3% to sales. The impact of net acquisitions increased sales by 1%. Cost past-through decreased sales by 1% with minimal impact on operating profit. Currency translation decreased sales by 2% driven primarily by the weakening of the Brazilian real and Mexican peso against the U.S. Dollar. Volumes remained flat due base volume declines largely offset by project start-ups.

Operating profit in the Americas segment increased $306 million, or 7%, in 2024 versus 2023 driven primarily by higher pricing, continued productivity initiatives and a settlement gain with a supplier, which more than offset cost inflation.

EMEA

The EMEA segment includes Linde's industrial gases operations in approximately 45 European, Middle Eastern and African countries including Germany, the U.K., France, Sweden and the Republic of South Africa.

Sales

EMEA segment sales decreased $190 million, or 2%, in 2024 versus 2023. Cost pass-through decreased sales by 4% with minimal impact on operating profit. Higher price attainment increased sales by 3%. Volumes decreased sales by 1% led by the manufacturing end market. Currency translation was flat.

Operating Profit for the EMEA segment increased $294 million, or 12%, in 2024 versus 2023. The increase was driven primarily by higher pricing and continued productivity initiatives, partially offset by cost inflation and lower volumes.

APAC

The APAC segment includes Linde's industrial gases operations in approximately 20 Asian and South Pacific countries and regions including China, Australia, India and South Korea.

Sales

Sales for the APAC segment increased $73 million, or 1%, in 2024 versus 2023. Volumes increased 2% including project start-ups in the electronics end market. Currency translation decreased sales by 2% driven primarily by the weakening of the Korean won and Chinese yuan against the U.S. Dollar. Cost pass-through increased sales by 1% with minimal impact on operating profit. Pricing was flat.

Operating profit in the APAC segment increased $112 million, or 6%, in 2024 versus 2023. The increase was primarily driven by volume including project start-ups and continued productivity initiatives which more than offset the impact of currency and cost inflation.

Sales

Engineering segment sales increased $162 million, or 8%, in 2024 versus 2023 driven by project timing.

Engineering segment operating profit decreased $81 million, or 16%, in 2024 versus 2023 due to larger benefits in the prior year from higher margin on lawful wind down of projects subject to sanctions in Russia.

Other

Other consists of corporate costs and a few smaller businesses including: Linde Advanced Materials Technology ("LAMT") and global helium wholesale; which individually do not meet the quantitative thresholds for separate presentation.

Sales

Sales for Other decreased $32 million, or 2%, in 2024 versus 2023. Underlying sales decreased 2% in 2024 versus 2023 primarily due to lower volumes in global helium and LAMT. The impact of currency translation was flat in 2024 versus 2023.

Operating profit in Other increased $19 million, or 44%, in 2024 versus 2023. The increase was driven by insurance recovery for LAMT partially offset by higher costs due to helium.

Currency

The results of Linde’s non-U.S. operations are translated to the company’s reporting currency, the U.S. dollar, from the functional currencies used in the countries in which the company operates. For most foreign operations, Linde uses the local currency as its functional currency. There is inherent variability and unpredictability in the relationship of these functional currencies to the U.S. dollar and such currency movements may materially impact Linde’s results of operations in any given period.

To help understand the reported results, the following is a summary of the significant currencies underlying Linde’s consolidated results and the exchange rates used to translate the financial statements (rates of exchange expressed in units of local currency per U.S. dollar):