Linde (LIN) Q1 FY26 earnings call: guidance and Q&A

Why were margins flat in Europe and down in Asia, despite overall strong performance, and what are the drivers?

Matt White explained that EMEA's weakness was due to lower volumes from a weaker industrial environment and Middle East conflict impacts, but actions are being taken. APAC's Q1 was seasonally weaker and impacted by lower-margin equipment sales connected to long-term contracts. He expects full-year margins to be at the top end or above the 40-60 bps range.

“On a full year basis, we feel pretty confident we're not only going to raise margins for the full year 2026, but probably at the upper end or even above our traditional range that we tend to talk about of 40 to 60 basis points.”

asked by Laurent Favre · answered by Matthew White

Given the previous $1 billion commercial space sales target by decade-end and the new 5% of group sales ($1.7 billion) threshold for isolating aerospace, is the target now higher or sooner?

Matt White clarified that the 5% threshold is for isolating aerospace as a separate end market. He reiterated confidence in the space economy, noting growth depends on launch frequency, size (propellant volume), and propellant type (hydrogen vs. other fuels). He feels good about Linde's positioning.

“it's going to be a function of frequency size and propellentype.”

asked by Laurent Favre · answered by Matthew White

How should we think about European on-site volumes and potential earnings upside, given some flexible assets running harder?

Matt White acknowledged some on-sites are running well but others have shifted production to other geographies (Americas). He cited challenges with energy and environmental policy uncertainties, and imports. He believes a significant catalyst (e.g., restrictive import policy, IAA funding reaching ground) is needed for a major shift.

“at this point, it's hard to see how all of those factors will create any significant change without some catalyst.”

asked by Patrick Cunningham · answered by Matthew White

Does Linde have the necessary capacity for the anticipated commercial space growth, or will new capacity be required? Will this be developed in collaboration with customers or as a merchant business?

Matt White stated it's in concert with customers. Early stages involve longer logistics, but as launch cadence increases, new contracts and closer infrastructure are needed to reduce logistics costs. It's a combination of sale of gas and sale of plant, similar to large on-site projects. Linde has strong capacity in concentrated launch areas and is working to secure more contracts.

“we are working with the major launch providers and also a lot of the up-and-coming providers, to make sure that we have the capacity and the contractual relationships to support them and their ambition.”

asked by Vincent Andrews · answered by Matthew White

How is this helium supply shock different from the Russian supply shock, and how long before pricing rolls into contractual business?

Matt White explained Linde's helium business is 85-90% contracted. Q1 global helium sales were flat YoY, with slight price decline and volume increase. He expects pricing to rise and roll through the year. He distinguished between the Strait of Hormuz/Qatar issue (capacity damage, multi-year impact) and the Russian issue (political, affecting Chinese market, potentially quicker resolution). Linde prioritizes long-term agreements.

“I fully would anticipate that to happen throughout the year. Separately, our volumes are up, and we've actually already secured some long-term agreements.”

asked by Duffy Fisher · answered by Matthew White

Can you clarify the status of the Darrow project and what's embedded in 2026 guidance?

Matt White stated that the Darrow project is phasing. Nitrogen is expected mid-year (pro rata start-up in Q1 backlog). The ATR and TNS (for sequestration) have slipped a few months into Q1 next year due to challenging construction environment in the U.S. Gulf Coast. A small portion will contribute this year, with the hydrogen and TNS side kicking in next year.

“But on the ATR and the S, that has slipped a few months into essentially Q1 of next year. The construction and subcontractor environment in the U.S. Coast remains challenging.”

asked by David Begleiter · answered by Matthew White

Discuss the overall volume landscape across major regions and if U.S. PMIs are benefiting North America.

Matt White confirmed improvements in Americas (U.S. Gulf Coast refining, Latin American upstream) and contraction in EMEA. APAC is relatively neutral to slightly positive, with China's coal-to-chemicals performing better than seaborne-dependent industries. He noted U.S. hard goods up double-digits and packaged gases up mid-single digits, driven by construction, energy, and metal fabrication, aligning with positive U.S. PMI.

“Our hard goods business is up double-digit percent right now in the U.S. packaged business. Our packaged gases are up mid-single digit.”

asked by Joshua Spector · answered by Matthew White

Is the Americas now on a cyclical upswing, or is there too much global uncertainty?

Matt White remains guarded, noting that while Americas results and trends are positive, EMEA is not. He wants to see all three regions (Americas, APAC, EMEA) running in the same direction for a true global recovery. He confirmed that global base volumes have turned positive, though not enough to round to 1%, and expects Americas to continue posting good numbers.

“I sort of think about it as we have an engine here with a few cylinders, right? And 1 cylinder is Americas, 1 is APAC and 1 is EMEA. And we're not running on all 3 cylinders.”

asked by Kevin McCarthy · answered by Matthew White