Stock Analysis on Net
Stock Analysis on Net

Linde plc (NASDAQ:LIN)

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Common-Size Income Statement

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Linde plc, common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Sales
Cost of sales, exclusive of depreciation and amortization
Gross margin
Selling
General and administrative
Selling, general and administrative
Depreciation
Amortization of intangibles
Depreciation and amortization
Research and development
Cost reduction program and other charges
Currency related net losses
Partnership income
Severance expense
Asset divestiture gains (losses), net
Insurance recoveries
Other, net gains (losses)
Other income (expenses), net
Operating profit
Interest expense
Interest income
Interest expense, net
Net pension and OPEB benefit, excluding service cost
Income before income taxes and equity investments
Income taxes
Income from continuing operations before equity investments
Income from equity investments
Income from continuing operations, including noncontrolling interests
Income from discontinued operations, net of tax
Net income, including noncontrolling interests
Noncontrolling interests
Net income, Linde plc

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Gross Margin and Cost of Sales
The gross margin demonstrated an improving trend from 41.7% in 2022 to 48.06% in 2024, after a slight dip from 43.53% in 2020. Correspondingly, the cost of sales declined from 58.3% in 2022 to 51.94% in 2024, indicating enhanced cost efficiency and improved profitability at the gross level.
Selling, General, and Administrative Expenses (SG&A)
SG&A expenses as a percentage of sales showed a fluctuating pattern. Selling expenses decreased initially from 4.78% in 2020 to 3.88% in 2022 but then slightly increased to around 4.04% by 2024. General and administrative expenses also fell from 6.94% in 2020 to 5.43% in 2022, before rising moderately to 6.07% by 2024. Overall, SG&A expenses declined from 11.72% in 2020 to 9.31% in 2022 but increased again to approximately 10.11% by 2024, suggesting some variability in overhead cost management.
Depreciation and Amortization
There was a clear downward trend in depreciation and amortization expenses, decreasing from 16.98% of sales in 2020 to 11.45% in 2024. This reduction contributes positively to operating margins, reflecting either lower capital expenditure amortization or improved asset utilization over time.
Research and Development (R&D)
R&D expenses remained relatively stable and low, fluctuating narrowly between 0.43% and 0.56% of sales. The stable investment in R&D implies a consistent focus on innovation relative to sales volume.
Other Income and Charges
Cost reduction programs and other charges showed a high degree of fluctuation, peaking at 3.08% in 2022 before decreasing sharply in subsequent years. Currency-related losses were minimal and somewhat stable, while asset divestiture gains transitioned from net losses to gains by 2024. Other income and net gains also improved, shifting from a small loss in 2022 to a positive 0.32% by 2024, indicating improving effectiveness in non-operating income sources.
Operating Profit
Operating profit exhibited a pronounced upward trajectory, rising from 12.19% of sales in 2020 to a peak of 26.16% in 2024. This significant increase highlights strong operational performance, likely driven by improved gross margins and controlled expenses.
Net Interest Expense
Net interest expense improved from -0.42% in 2020 to -0.19% in 2022, reflecting lower net costs of borrowing. However, it increased to -0.78% by 2024, indicating rising interest expenses outpacing interest income in recent years, which may reflect higher debt levels or interest rates.
Income Taxes
Income taxes as a percentage of sales generally increased from -3.11% in 2020 to -6.07% in 2024, suggesting a higher effective tax rate or greater taxable income proportion relative to total sales over time.
Net Income and Earnings
Net income illustrated strong growth, increasing from 9.18% in 2020 to 19.89% in 2024. Income from continuing operations followed the same pattern, evidencing improved earnings quality and sustainability. Noncontrolling interests remained relatively stable as a small negative percentage of sales, minimally impacting consolidated net income figures.
Summary of Trends
The overall financial performance demonstrated a clear enhancement in profitability and operational efficiency. Key drivers include improving gross margins, reducing depreciation and amortization burdens, steady control over SG&A expenses despite some volatility, and significant growth in operating profit and net income. However, rising income tax expenses and increasing net interest costs during the later periods represent aspects to monitor. The consistent low R&D spending and improvements in other income sources further underscore strategic stability over the examined period.