The Public Limited Company (PLC) is found primarily in Anglo-Saxon countries. Since October 2018, this type of company has also enriched the DAX. Linde PLC made its debut in the German share index at that time. The new corporate form for the industrial gases group, which previously operated as a "Aktiengesellschaft" (AG), resulted from a merger worth billions of euros. Linde merged with its U.S. competitor Praxair almost three and a half years ago. The PLC is one of the top performers in the DAX. At the end of 2021, Linde traded at more than EUR 300 for the first time, followed by the stock reset with the broad market. In March, the large-cap dynamically broke through the short-term downward trend to the upside. Thus, the new CEO of the industry giant experienced a perfect debut.
Since March 1, Sanjiv Lamba, a Linde veteran, has been at the helm of the group. The finance expert began his career in 1989 in the company's India business. After being appointed CEO, Lamba promptly gave shareholders a kind of inaugural gift: Linde announced a USD 0.11 increase in the quarterly dividend to USD 1.17. At the same time, the Group announced a new share issue. At the same time, the Group announced a new share buyback program. Linde intends to invest up to USD 10 bn in its own share by the end of July 2024. Only recently, the company had completed a USD 5 bn buyback program. According to the new CEO, the high cash flows make a generous dividend policy possible. Linde has been able to increase its cash inflow in recent years successively. In 2021, operating cash flow approached USD 10 bn (see chart).
From his predecessor, Steve Angel, the new CEO has not only inherited a well-filled cash box. Sanjiv Lamba can also build on a thick order book. By the end of 2021, Linde had a record order volume of more than USD 13 billion. The forecast is positive: Lamba is targeting growth of between 8% and 11% in adjusted earnings per share for the current year. The group's broad customer base makes it relatively crisis-resistant. For example, Linde supplies hospitals with oxygen, equips metalworking companies with welding and cutting gases, and sells isotopes to the semiconductor industry. The company also builds turnkey gas liquefaction and processing plants located in chemical plants, among other places.
In addition to the dividend increase, the share buyback and the forecast, Linde has probably been helped on the stock market in recent weeks by the general comeback of hydrogen shares. The company plays a leading role in this market of the future and covers the entire value chain according to its statements. Consequently, management has launched an initiative to consider the importance of this energy carrier in the fight against climate change. Among other things, Linde is currently building the world's largest PEM electrolysis plant in Leuna, Germany. It will supply industrial customers with green hydrogen via the company's pipeline network. Linde plans to ramp up the 24-megawatt plant in the second half of the year. The company has already installed almost 200 hydrogen filling stations worldwide.
Leonteq is now responding to the momentum of the large-cap with a new issuance. The Zurich-based fintech company has launched three softcallable barrier reverse convertibles (BRCs). Exclusively Linde-based products provide - in both EUR and CHF - a guaranteed coupon payment of 7% p.a.. The DAX share starts the 18-month term with a risk buffer of 31%. As long as Linde does not use this cushion, the maximum return corresponding to the coupon is fixed. A multi-BRC is also new to the market. In addition to Linde, its competitors Air Liquide and Air Products & Chemicals act as underlyings. The trio leads to a coupon of 10% p.a. in CHF, with a barrier at 66% of the initial fixing level. The "worst of" principle applies: as soon as a share touches or falls below the barrier, the partial protection expires. The investment would then be linked to the performance of the weakest stock at maturity. All products are so called "Softcallables". Therefore, early termination and redemption may occur.
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