Earlier there was remark came from the Praxair INC that company had retained massive growth rate from entire world except Europe. On the same lines Linde Group has too paid a lot for Euro zone current crisis. Recently in the interviews, Company CEO mentioned Germany should mull Euro. Today Germany is the largest economy of the world & fifth largest after US, China, India & Japan on GDP scale. In spite of poor economics across the Europe, Germany economy has shown mild growth in the recession. According to Linde Group CEO, Germany exit from Euro is an option to sustain growth rate in the recession times. Exit would create huge unemployment but increase competitiveness as compared to Asian economy. Even Linde’s Asian groups performed much better in terms of European Linde AG.
Although scenario is not desirable but German industry would survive globally in a new currency. Reitzle mentioned as Euro zone is unlikely to break up completely but Greece is not in a position to serve its debt. Structural reforms can only prolong the economy from upcoming crisis. Long term recession has hit harshly & hardly to Linde’s sales revenue. If it goes for long time or years, it would impact 30 percent of Linde’s overall revenues, Reitzle said.
Few more things highlighted by him, during his interview.
- Germany’s willingness to tackle debt ridden economy may impact us more than anybody else.
- If Germany is unable to succeed in the discipline crisis countries, Germany needs Fresh Exit.
- He requested Germans to pay more 50 percent taxes to fund the zonal crisis & rescue us from crisis circus
- Calmly he talked about new currency exploration, which would lead to new benchmark that to be appreciated in valuable aspect. But it would be quite lesser than feared ones.
- Restructuring country’s union reform would be the better way to exit the crisis wind.
- Balancing fiscal disciple should be the top priority for Euro zone countries
Last year company’s was the largest Industrial gases company; today it came down to 2nd position due to euro zone crisis only. In third quarter company reported good nos as per compared expectations from analysts. 3rd Quarter earnings have helped company to make sure continuity in the growth cycle as cost savings & higher demand in the emerging markets. Air Liquide had credited developing economies of the globe for current quarterly sales while Linde too experiences the same development tune.
During third quarter results, Reitzle said despite of economic activity loses a little pace, we continue to see good growth opportunities for our business, especially in energy & the environment and in the emerging economies. Presently, Linde’ growth drivers are concentrated in Asia not in Europe, as South Korea, China, India, Malaysia are the emerging fronts in sales for Linde’s overall sales revenues. Even Linde BOC Australia is also showing growth trends in Pacific region.
Today, Linde Group has well reputable & established brands of Linde, BOC, MOX, Afrox and PanGas, Certainly it offers a great dividend paying record over the last 10 years without any reductions. Figures say, the 3-year growth is 9% and 5-year growth is 9.5% whereas only downside is low current yield at 2%. Future yielding would be around 3% percent as stock analysts. Its depending on economics & global gases $70bn market.
Recent expansion in Health care & oxygen market, especially after the acquisition in Air Products European business company plans few more projects in the coming days. Asian market is the key emerging market in Linde’s revenues, where company goes for many new innovative products & strategic policies. Could be expecting further announcements from company in 2012.
Sources: News Agenics