Abby, thank you. Good morning, everyone, and thanks for attending our 2026 first-quarter earnings call and webcast.

I'm Juan Pelaez, Head of Investor Relations, and I'm joined this morning by Matt White, Chief Financial Officer. Today's presentation materials are available on our website at linde.com in the Investors section.

Please read the forward-looking statement disclosure on page 2 of the slides and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are in the appendix to this presentation.

Matt will provide some opening remarks, I'll give an update on Linde's first-quarter financial performance, and then Matt will finish the updated outlook, after which we will wrap up with Q&A. Let me now turn the call over to Matt.

Thanks, Juan, and good morning, everyone. The Linde team delivered another solid quarter against a challenging economic backdrop.

EPS of $4.33 grew 10%, operating margins reached 30%, and return on capital remained at a healthy level of 24%. The high-quality compounding growth of our company, no matter what the environment, is a testament to the unwavering commitment of all 65,000 employees to create shareholder value.

Given the recent geopolitical volatility, it may be helpful to provide a brief update by end market, which you can find on slide 3. As a reminder, the top half shows consumer-related end markets at approximately 1/3 of sales, while the bottom half represents industrial-related markets for the remaining 2/3.

The growth rates reflect price and volume, but exclude FX or M&A. Starting at the top, healthcare at 16% of global sales grew 1% year over year.

We provide gases, equipment, and services to medical institutions such as hospitals, and direct to the home. Normally, a resilient market like this should grow in line with demographic trends, or low-to-mid single-digit percent.

While we're experiencing those growth rates in most countries, the US home care business has been relatively flat. In late 2025, a new US healthcare policy resulted in less services for a specific piece of equipment, which is reflected in the current run rate and will continue for the next several quarters.

Aside from this particular issue, the rest of healthcare is performing as anticipated, while providing a resilient balance to the more cyclical markets. At 9% of sales, food and beverage grew 5% from broad-based strength.

The largest contributor is the US beverage business, where we continue to see increased customer need for new services and applications. In addition, traditional bottling and food freezing growth remain quite strong, especially in North and South America.

Overall, food and beverage has grown mid-to-high single digits over the last several years and is expected to remain a steady contributor. Electronics increased the most at 10%, primarily driven by continued investments in advanced chips to support AI.

The growth is heavily weighted toward the US, China, and Korea, since our substantial electronics sales in Taiwan are excluded as a non-consolidated 50% joint venture. As both the scale and industrial gas intensity continue to expand in this sector, Linde remains well-positioned.

We're currently investing more than $1 billion of the project backlog for ultra-high-purity plants, which will support the most advanced fabs in the world. There's more to come, as we have a high degree of confidence in adding substantial new projects to the backlog this year.

Moving to industrial end markets, you can see growth across the board, which supports the notion we're starting to lap more difficult comps after years of stagnant industrial activity. Chemicals and energy, representing 22% of sales, increased 3% as growth in Americas and APAC more than offset contractions in EMEA.

Americas was driven by higher activity for hydrogen and nitrogen in US Gulf Coast refining and Latin American upstream energy. While APAC increases primarily came from our recent investments in the Jurong Island Integrated Complex.

EMEA continues to experience negative volumes, primarily from on-site customers shifting production to more competitive assets outside Continental Europe. It remains to be seen what the longer-term effects could be from the Middle East conflict, but so far, it appears activity is relocating to more feedstock-advantaged assets in Americas and, to a lesser extent, APAC.

While we're on this topic, I think it's worth providing a brief update on our helium business. Helium was in oversupply for a few years through 2025, but recent events have created acute global shortages.

Linde sources from a very broad base, since supply chain constraints are a recurring challenge. Therefore, we are currently well-positioned despite some of the recent outages.

Given our business is largely contracted, the priority is to meet existing customer commitments. After that, we still anticipate excess molecules allowing us to pursue new multi-year contracts with high-quality customers.

Therefore, I don't anticipate significant spot sales this year, since we're focused on securing long-term agreements. Returning to the end market slide, metals and mining grew 3%, similar to chemicals and energy.

The entire growth is coming from Americas, as both APAC and EMEA are relatively flat. A combination of better industrial activity and protectionist policies from US to Latin America have supported local metals production over imports.

Furthermore, we're seeing renewed competitiveness from customers of more gas-intensive integrated blast furnaces when compared to the EAFs, primarily from constraints associated with cost-effective scrap and electrical infrastructure. The last industrial end market of manufacturing grew 5%.

Half of the increase came from aerospace activity in the United States, primarily supporting space vehicle production, testing, and launch, as this end use continues to see strong double-digit percent growth. We'll isolate aerospace as a separate end market when it consistently exceeds 5% or more of global sales, which will be a function of the frequency, size, and propellant type of future space launch.

Excluding aerospace, the remaining end market grew low-single-digit percent, as strength across the Americas, especially in the US, was partially offset by continued weakness in EMEA, while APAC slightly improved over last year. Within the US, packaged gases grew mid-single-digit and hardgoods double-digit percent, which aligns with the recent favorable US production statistics.

In hardgoods, growth was balanced between consumables and equipment, and driven by energy, construction, and general metal fabrication. EMEA activity was softer from continued weak industrial activity, including direct and indirect impacts from the Middle East conflict.

In APAC, we experienced moderate volume growth driven by China and Southeast Asia. In summary, the portfolio is doing what one would expect.

As geopolitical events shift production around the world and secular growth trends drive concentrated investments, our business units continue to adapt and capture their fair share. While no one can predict how the next few months will play out, let alone the next few years, I'm confident the Linde team can navigate the volatility and continue to deliver high-quality compounding growth.

I'll turn the call over to Juan to walk through the financial results.

Matt, thank you. Please turn to slide 4 for our consolidated results.

Sales of $8.8 billion were up 8% year over year and flat sequentially. Versus prior year, foreign currency was a 5% tailwind, driven primarily by the strengthening of the euro.

Net acquisitions contributed 1% from attractive roll-ups we've been executing globally. This quarter alone, we signed nine more bolt-on acquisitions, primarily in the Americas, which will continue adding to future EPS growth.

Underlying sales increased 3% versus last year from 2% higher pricing and 1% higher volumes. Volume increase was driven by the project startups, primarily in APAC.

Both Americas and APAC continue to see base volume growth, but it was mostly offset by EMEA due to the weaker economic activity in the region. Sequentially, underlying sales were flat, as higher pricing was offset by lower volumes, mainly in APAC and EMEA.

The lower volumes was driven by seasonal factors, especially in APAC, followed by EMEA, where we continue experiencing weaker trends in the industrial end markets. Price continues to drive underlying sales growth, highly correlated to local inflation levels.

Recall that actual price increases are higher for the combined packaged and merchant gases, which represent roughly 2/3 of total sales. Operating profit of $2.6 billion increased 8% year over year and resulted in a margin of 30%, similar to prior year.

Sequentially, margins improved 50 basis points, driven by management actions in pricing and cost productivity that more than compensated for seasonal volume declines. We expect management actions to continue to support profit growth and margin expansion for 2026.

EPS of $4.33 was 10% over prior year, or 5% when excluding the effects of currency translation. We finished the quarter slightly above the top end of the guidance range due to better FX, as the underlying business performed as anticipated, considering the many challenges globally.

Operating cash flow was $2.2 billion, 4% higher than prior year. Capital expenditures were $1.3 billion, and as a result, our free cash flow was $900 million, which we used primarily to pay dividends and repurchase shares.

The CapEx of $1.3 billion was roughly split between base CapEx and project backlog. Have in mind that base CapEx is primarily maintenance and all other growth investments not meeting our stringent backlog definition.

For example, current investments to serve commercial space. In this quarter, we started up 10 projects from the sale of gas backlog, mostly in Americas and APAC, with investment of approximately $300 million.

Furthermore, we signed five new projects that added $100 million to the sale of gas backlog, which ended the quarter at $7.1 billion. Industry-leading return on capital ended the quarter at 23.8%, a reflection of capital discipline, consistent earnings growth, and good backlog execution.

Slide 5 provides further details on quarterly capital management. The operating cash flow trend can be seen to the left, with the most recent quarter of $2.2 billion.

Note, the first half of the year is weaker due to the seasonality of cash payment timing for interest, taxes, and incentives. For 2026, we anticipate a similar trend as last year.

To the right of the slide, you'll find a pie chart that demonstrates the balance across investing into the business and returning capital to shareholders. Disciplined capital allocation is a hallmark at Linde and is something that differentiates us from others.

During the quarter, we raised the annual dividend by 7%, making it 33 consecutive years of dividend growth with an average growth rate of 13%. We also repurchased $800 million of stock during the quarter, while reinvesting almost $1.5 billion into the business.

Our capital allocation model remains consistent across all environments. In periods of uncertainty and volatility like today, a fortress balance sheet is critical not only to maintain stability, but also to capitalize on growth and share repurchase opportunities as they arise.

Thank you, and I'll turn the call over to Matt, who will wrap up with the guidance update.

Slide 6 provides the updated 2026 guidance. Starting with the second quarter, we anticipate EPS in the range of $4.40 to $4.50, or 8% to 10% growth.

This includes a 1% currency benefit, but consistent with prior quarters, assumes no economic improvement at the midpoint. For the full year, we're updating to a new range of $17.60 to $17.90, or 7% to 9% growth.

Like the second quarter, this includes a 1% currency tailwind and assumes no economic improvement at the midpoint. Also note, both ranges do not include any improvements in the helium business versus the February guidance, any incremental volumes or price would be upside.

When compared to the prior guidance, we raised the bottom by 20 cents from increased confidence in the overall business resiliency. However, we left the top at $17.90 because it's still early to signal increased optimism.

There are a lot of things happening in the world right now, and I'd like a few more months before considering a top-end raise. Overall, we had a decent start to the year, but remain guarded until we see more clarity on current geopolitical events.

I'll now open the call to Q&A.

Yes. Good morning, guys.

Thank you. My first question is on margins.

You mentioned the strong improvements in the Americas, and I was wondering if you could talk about, I guess, the big moving parts of why while Europe was flat, Asia down. Is it helium?

Is it the rapid cost inflation in March which created a temporary squeeze? Any help there would be very helpful.

Sure, Laurent. I'll start with, and we said this last time, and I just want to reiterate it again this time, 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.

Now, stating that on the full year, you're always going to have some moving parts within the quarters. I think when you think about Europe, clearly that the volume is a bit of a drag.

I think within EMEA as a whole, we mentioned on the call between a combination of the overall weaker industrial environment, weaker chemicals environment, add to it both direct and indirect impacts from the current Middle East conflict, we're just not seeing the volume recovery there. I could tell you we're not happy with the performance.

The business team is taking actions to improve that. They know that.

I expect to see some improvements there in Europe. With APAC, we did mention on the backup slides, we had about half of the sales growth was a sale of equipment.

That actually is equipment that is connected to long-term merchant contracts in electronics, so that does come with future contracted merchant sales. That'll tend to be a little bit lower margin on average.

It's a kind of a one-off. Also, as Q1 is traditionally weaker in APAC, just given some of the seasonality effects.

I expect APAC to kind of get back up to the 29-type percent margins we saw last year as the team there continues to work towards improving that. Some of it's timing, some of it's just a little bit of some effects on the volume.

On the full year, we fully expect to not only raise margins, but probably the top end or above. Again, this is all ex pass-through, up or down, as which is just more optics on the margin and no real effect to profit dollars.

Sure, thank you. As a follow-up, you mentioned that you'll disclose commercial space sales when it gets to 5% of the group, which is about $1.7 billion.

I think recently or on a prior call, you mentioned that you thought sales in commercial space would get to about a billion by the end of the decade. I'm just wondering, are you now thinking that we may get closer to $1.7 billion by the end of the decade?

It's a big change.

Laurent, I'll start with look, we feel very good about our positioning to support the space economy and as that develops. Clearly, in the US, you're seeing that much more rapidly with the private commercial space sector.

Even across outside the US, we're definitely seeing acceleration in those efforts. With controlling the customer, that's going to be their determination on launch.

It's like I mentioned on the call, it's going to be a function of frequency, size, and propellant type. What that means, I think frequency is self-evident, how many launches occur.

With size, it can be dramatically different. Much larger rockets and much larger booster systems can use orders of magnitude higher of propellant.

As you can imagine, something, for example, the largest rockets out there versus the smaller ones, you could see 10x difference on fuel and propellant. Then the fuel or propellant type is important, because while we supply oxygen for the oxidizer and nitrogen for densification, fuel-wise, there's really three types today you'll see, which is either kerosene, methane, or hydrogen.

Obviously, we supply hydrogen. We do not supply the other two.

We would do only sale of equipment for things like LNG. If you do see more hydrogen-based rockets, that could also accelerate the growth for us depending on the fuel type used.

We feel pretty good about it. You look at the ambition on getting satellites and constellations in space today, you look at the existing population and what needs to be replaced in low Earth orbit roughly every 5 years, I think it continues to bode well for launch.

Not only in the major players, but there is more room for maybe some new players that can be supporting the demand out there to get more constellations in space. We'll see where it ends up.

I think it will all be a function of the launch cadence, but we feel quite good about our positioning to supply that when it happens.

Thank you.

Hi, good morning. Thanks for taking my question.

I guess first, as you think of maybe the longer-term implications of this crisis, it seems like there's probably a heightened focus on energy security, deglobalization. I'm curious as how you're thinking about how potential conventional energy and energy transition projects should trend as a result?

Thanks, Patrick. The natural reaction is exactly like you stated, right?

Energy independence will be more accelerated. One can argue we've already been deglobalizing as a global economy, and this may have accelerated some of that.

Energy security continues to get a lot of highlight and spotlight when you see these supply-type shocks that occur. My opinion, ultimately, it still comes down to economics and ability.

While renewable energy will continue to be a area of high interest, it's still going to require government intervention. It'll require some support, sponsorship, potentially some kind of subsidies as we've seen in certain geographies.

I think without that, it's hard to see that happen on its own, as we've seen, but time will tell. I think as far as other hydrocarbons, I absolutely believe you'll see more of that.

Clearly with other LNG in areas that are probably less of concern countries, you could see areas like oil sands of Canada become more interesting again just given that the exploration risk is almost non-existent. They know the product is there.

It's just more of a logistics challenge to get it seaborne or to get it piped to where it's needed. I just think that some of the more traditional areas will get another hard look given the uncertainties in the hydrocarbon space.

I do think you'll get renewed interest in renewables, but again, without the support of government to help that on everything from right-of-ways, to land, to permitting, to bridging some of the economics, it'll be hard to see that accelerate at a clip that people wanted to.

Got it. Just on European, sort of outlook, how should we think about on-site volumes and potential earnings upside for the balance of the year?

I think despite some of the feedstock and energy challenges, we have heard some more advantaged or flexible refining and petchem assets, running a bit harder sort of month to date. How do you square that with sort of the outlook?

What are sort of the puts and takes in terms of mix there as well?

Sure. I think we do have some on-sites that are running well that you could argue are state champions or regional champions.

On the flip side, we definitely see some shift production, right? They're shifting into some of the assets we supply in other geographies, primarily in Americas.

I do think part of it also in Europe right now in my opinion, you have a bit of a challenge with some of the uncertainties, right, around energy policy, around some of the environmental policy. Clearly, there's a lot of imports, and not just on the base material sides, but on the finished goods sides as well.

At this point, it's hard to see how all of those factors will create any significant change without some catalyst. Whether that catalyst is some type of restrictive import policy or more clarity on the environmental policy, clearly with the IIA, that could help.

I think that money needs to find its way on the ground. If it does, that could help turn some of that around.

That's, to me, what we just need to see. If we see a catalyst there of some significant type, it should help.

It could be anywhere from maybe some import restrictions to the IIA hitting the ground, but aside from that, it's hard to see a major shift.

Great. Thank you so much.

Thank you, and good morning. Matt, circling back on the space side of the equation and the idea of getting to that 5% of sales, do you have the capacity you need to get there, or should we be anticipating some type of capacity increase, maybe it's in different geographies, and would you do that in concert with customers or would you do that on your own and make it more of a merchant business?

How should we be thinking about that?

Sure. I think, Vince, it's really in concert with customers.

In my opinion, you have several launch providers that are doing a variety of different engine testing, they could do static testing, gimbal testing, whatever they're doing, and the locations they want to do that could very well be different than where their pad is, where they launch. Once they start migrating to more frequent launches, which can migrate from wet dress rehearsals all the way to full launch, you're going to want to make sure logistically you're as close to the pad as you can be.

From my perspective, 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 in their ambition. The way it kind of works is, in the early stages, you're probably going to do longer logistics hauls when it's more infrequent and intermittent.

Then as they get onto a better cadence, then you start talking about new requirements contracts in supporting a more stable launch cycle. That you put closer, and so you eliminate the logistics costs, which obviously makes their costs lower on the propellant.

It's a combination, it'll be sale of gas, obviously. It also could be some sale of plant.

We do both, we support. It's very similar to what you would see in the large on-site where at times we've sold plants and sell the gas, and we literally run the system of all the plants.

I think that's what you're seeing. As you can imagine, there are some very specific areas where the launch sites are concentrated, given FAA regs and what you need to do around that for the air space.

That's where we have a very strong capacity today and we're working to secure more contracts with our customers for the future launch needs.

Thank you.

Good morning, guys. By far the most incoming questions I'm getting on you guys is around helium, and I know you guys talk about it being kind of a small part of your business.

In the last supply shock we had with Russia, you did see pricing start to roll into some of the contractual business. I guess how do you see this supply shock playing out differently than what the Russian supply shock did, and how long would the strait have to be closed before you'd start to see some of that pricing roll through some of your contractual business?

Sure, Duffy. Maybe I can level set it with what are we seeing in helium in the first quarter.

I'll start with our helium business, depending on the time, we're anywhere from 85% to 90% contracted on our customer base. That's kind of a starting point.

When I look at Q1 year over year, our global helium sales, for the most part, were roughly flat. What we saw was a couple percentage decline in pricing year on year and a couple percentage increase on volumes year on year.

Now, as with the Iranian conflict, it sort of happened 2/3 into the quarter, one can roughly argue you had kind of 2 months before and 1 month after based on the date. We've been seeing the pricing rise on the average pricing.

Even though we're a few percent below pre and post that, there is a difference. Likely that price will continue to go up and roll its way through.

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.

I fully expect we'll secure more long-term agreements, that is our priority. That's how I would see that play out.

Now, when you think about the helium situation, you have two sort of distinct issues happening at once. You obviously have the Strait of Hormuz with Qatar and their inability to get product out, and also the question of how much capacity is out for multi-years based on damage.

Separate and distinct, you have this Russian issue going on, which is probably a little more political in nature. Now, we don't take Russian supplies, you can imagine, but that is having an effect primarily on the Chinese market.

That one could fix itself much quicker, as you can imagine. That one, we'll see how long that lasts.

I think either way, the way we built the guidance, we just didn't want to take a view either way. We just left it as we had it.

When opportunity presents itself both on pricing and volume, that will be incremental, and that's something we will get above how this is guided today.

Terrific. Thank you, guys.

Thank you. Good morning.

Matt, on electronics, I know you're expecting a couple of large contracts this year. Are they still in progress, on the come for 2026?

David. Consistent, yeah, with how the prepared remarks, we have a pretty high degree of confidence that we'll be announcing some here shortly.

When I think about the project backlog itself for sale of gas, we're sitting a little over $7 billion right now. I look to these being added, and based on some timing of some other projects, I'd fully expect us to have a higher backlog by end of year based on this, higher than the $7 billion, and could potentially have an 8-handle on it based on this.

We feel pretty good about that. That's something I expect in a few months we'll be able to lay out there.

Very good. Just on Woodside, there's been some confusion, some conflicting new stories.

Can you level set us as to where you stand on that project, and what's embedded in 2026 guidance?

Sure. I think, David, you may recall in prior conversations when we described this project and other very, very large projects like it, they tend to phase in how they start up.

You'll start up pieces and phases. Originally, our expectations were that we'd be bringing nitrogen on mid this year, and then the ATR and what's called the T&S for the sequestration back end of this year.

The reason was so they could make gray hydrogen as soon as possible, and then convert it to blue by end of year. On the nitrogen, we still fully expect that.

That'd be a pro rata, to speak, start up on the backlog this quarter. On the ATR and the T&S, that has slipped a few months into essentially Q1 of next year.

The construction and subcontractor environment in the US Gulf Coast remains challenging, and we've had some delays there. Rest assured, the team is 100% focused on this to get this up as fast, as safe, and as reliably as possible.

That's our focus. This slip has caused a little bit of that, my expectation in that project is you'll have a small portion in contributing the startup this year through the atmospheric side of it, and then the hydrogen and T&S side will kick into probably Q1 of next year.

Thank you.

Hi, good morning. I was wondering if you could talk about the overall volume landscape across kind of the two major areas here between Asia and then Europe and the Americas.

Understanding your guidance is kind of no economic improvement, but just the geographic location of your assets relative to where there's disruption, it would seem like there's probably some volume benefits on the Americas and Europe side versus Asia. I'd be curious, one, is that right, or is there more disruption in Asia that makes it kind of even?

Then also, if you can comment just in your North America specifically, are you seeing any kind of benefits from what we've seen from positive PMIs the last few months? Thanks.

Josh. Let me start with the first part.

Definitely, we are seeing improvements in Americas on the dislocation or shifting of product. We are seeing some contraction in EMEA and both Continental Europe.

Now, we have a very, very small Middle East business, but as you can imagine, that's most impacted as a percentage basis. Continental Europe itself, we also saw some drag there.

Then APAC for us is relatively neutral to slightly positive. When you kind of break those three down, in Americas, as I mentioned on the prepared remarks, we're seeing not only benefits in the US Gulf Coast refining, and when you think about refining in the US Gulf Coast, you tend to have very high Nelson complexity, you have ability to use a variety of slates of crude, and so given where the 3-2-1 spreads have gone, given their ability to manage some of the crude spreads, I think they're in a very, very strong position, and a lot of their product is supplied via the continent, and so they can take advantage of that, and we've seen that.

We've also seen Latin American upstream improvements given the price of seaborne Brent. It just makes it more attractive for them to produce.

We've clearly seen that. In EMEA, you've seen, as we mentioned, some of the chemicals was one of our weaker-performing chemicals and energy, as we've seen some reduced volumes on that front.

APAC, I think with APAC, it's a tale of two stories in the sense that certain countries are very negatively impacted, but we really don't supply that. When you think about Japan or certain industrial markets maybe in Korea where they rely on seaborne delivery for some of their hydrocarbon chain, that is very negatively affected, right, whether it's naphtha or LNG or oil.

We are really not supplying many of those. We have no presence in Japan.

On the flip side, coal to X, coal to chemicals or coal to something in China is actually performing better. We're seeing that we have several customers that are C-to-X customers within China, and they do have an advantage in this scenario.

The simple way I think about it is if your feedstock is coming on a ship, it's probably a tough scenario for you. If it's land-based, right, either a pipeline or maybe even a rail car, you're probably in a little bit better position.

That's kind of how I would say we're seeing it play out today. As far as the PMI, yeah, that was kind of per the prepared remarks.

Our hardgoods business is up double-digit percent right now. In the US package business, our packaged gases are up mid-single-digit.

Really where we're seeing that strength is on some of the construction, energy side, which you can imagine, it plays a little bit to some of the hyperscaler constructions and things you're seeing on that front. I think that continues to be good.

Metal fabrication continues to be strong. We've really seen that pick up across.

On the hardgoods, it's really split between consumables and equipment, which is a healthy split. I think you're absolutely seeing that positive benefit from the US PMI prints.

Thanks. If I could just also quickly clarify a prior question.

When you've talked about commercial space getting to a billion, my understanding was that was more commercial space launch. You have another $600 million plus in commercial aero, that's more the coatings business.

Your prior comments were more that maybe you get to that 5% in 2030 timeframe, maybe. Then maybe your comments today about some of the disclosures is maybe you can get there sooner than expected.

Is that the right interpretation, or do I have it wrong? No,

I think you're right, Josh. Look, I used the word aviation within aerospace, and yes, aviation is a very different animal.

That's for primarily jet engines, and that business is doing quite well in addition. There's always a saying, never give a number in a year, right?

I think we put something out there to give us enough room to do it. We feel quite good on not just our propellant launch infrastructure and capability, but even when you get to things like electric propulsion for positioning of space vehicles on things like xenon, krypton, argon.

When you add all the opportunities together, yeah, I think we feel pretty good about our ability to grow this business quite well, and really, like I said, it'll just be a function of the space launch. You are right that any of those numbers fully exclude aviation or anything to do with land-based pieces around jets or jet engines.

Thank you.

Morning. European energy prices clearly up from pre-conflict levels, and I know it gets passed through on on-site, but how are you managing merchant and package pricing?

Is this going to be something where you go out with structural price or you surcharge? Is it not enough inflation yet to be pushing price more in Europe than normal?

If you are, what should we think about as being kind of the year-over-year price traction for the EMEA market come 4Q?

Matt, the way to think about it is, is it a sustained increase in energy or is it a volatile up and down? Right now, so far, it's been volatile up and down.

When it's volatile up and down, it is surcharging. That goes up, that goes down, and that's what we're seeing.

When you see a sustained long range, it eventually then it becomes price, and it starts to work its way into the overall inflation of the market. 2021 was an example, or 2022, I should say.

In early 2022, as that evolved throughout the year, you saw more sustained impact to inflation that worked its way through the entire economy. It started as surcharges, it eventually became price.

Right now, it's just surcharges. If it does stay sustained and you start to see it show up in a lot of the major basic inflation metrics, then it does find its way into price.

That's the way I would characterize it today, and time will tell how that plays out.

Thanks, Matt. I'll hand it back.

Hey, guys, good morning. Just I guess this is going to be what, the third or fourth year of no economic improvement for industrial demand.

I can't imagine the Iran conflict is going to help that move in the right direction. Just curious, what do you think just sort of needs to happen?

It just seems like overall there's been some impairment for industrials. What do you think needs to happen to get that overall globally to improve over time?

Mike, I think some level of stability always helps, right? When you think about industrial demand, at least in my opinion, it tends to be large items, non-durable or durable goods, non-resi infrastructure, and to embark on those kind of projects, they usually require financing, they usually require a long-range view on a return profile, they usually require some form of government engagement, support.

Right now, it's been a little volatile. It's been volatile in the macro.

One can argue in certain micropolitics and microeconomics, it's been volatile in certain countries. I think that's been part of the challenge.

Additionally, the service economy, the consumer has been pretty resilient over the last few years, which has held GDP up. If that changes, I think that could actually, ironically, bode well for industrials, because then there could be more call to action to support injections into economies.

You could argue the IIA to some extent is that, right? You've seen continued lagging in Europe, and they've made the determination they need to inject capital into the economy, and that capital tends to be more industrial-intensive.

Now it has to reach the ground. It has to have clarity around its use and its ability to be deployed, but that's kind of the type of catalyst.

Look, I think the Americas and the US especially has been a little bit of an indicator that, to some extent, certain placed protectionist policies can work. We've seen it in the metals, we've seen it in some other areas.

Yes, it brings some confusion initially, but the US has seemed to bounce back. We all know there is excess capacity in certain markets in the world, and we kind of know where it's coming from.

I think it's really a function of who is making the capacity for what. We'll see.

I think right now though the Americas, we continue to feel pretty bullish on and the trajectory it's on. As I mentioned, I think with EMEA, it really's going to come down to some catalysts to try and change that trajectory.

APAC is fine right now. We're seeing certain geographies do better than others clearly, but our Chinese business is very stable, India is growing, and we'll just have to see how the rest play out.

Great. Then a quick follow-up for chemicals and energy.

Sales are up 3% in the first quarter on slide 3. What do you think the run rate of that is heading into the 2Q?

I would imagine March was much stronger than the other two months given the conflict. Just curious where that segment is sort of moving into this quarter?

Sure. It's led by the Americas, as mentioned, and we really haven't seen any reason that that should decline or abate.

I think the strength is still there and is still anticipated. The comps, as I mentioned, definitely get a little easier here on out as we start to lap, as we mentioned, a couple years of some industrial stagnant conditions.

We'll see, but I feel pretty good it'll remain positive throughout the year, and we'll see how much it remains positive.

Thank you.

Thanks very much. In your commentary on the Americas for the first quarter, you talked about weakness in chemicals and energy end markets.

I assume that that will strengthen. As a base case, should volume of 2% year over year move up to, I don't know, 3% or more in the second quarter?

Are there also pricing opportunities because energy and chemicals are better?

Jeff, I think with chemicals and energy, yeah, we're better in Americas, but weaker in EMEA, as mentioned. I think this is, yeah, mostly on-site, the pricing will just be a function of the annual escalation, which the contract would state.

That being said, we are seeing some more merchant activity for upstream oil, primarily Latin America, it's an opportunity for further volume expansion. I feel pretty good about the Americas' position, competitiveness, and capability in chemicals and energy.

As mentioned before, it's been on a good trend, and I'd expect that to continue. Recall, there were a little bit of some normal weather aspects that happened in Q1, which could always dampen it a little bit, and you get through that by Q2.

We feel pretty good about what we could see in Q2 on those trends. Again, it always comes down to my mind the same basic situation, which is the lowest-cost suppliers in this environment tend to win in these times of supply shock stress.

When you think about a lot of the assets in Americas with their advantage feedstock, their infrastructure, their capabilities, the complexity they can handle, they tend to be some of the lowest cost and best producers in these environments. I feel pretty good about how they'll perform looking forward, and especially in the near term.

Okay. Then secondly, your other income in the quarter was $63 million versus $26 million a year ago.

What happened there? Was the currency benefit in the quarter about 3% on EPS or maybe $80 million pretax, or do you have a different number?

Let's just take the second question first. On FX, a simple way to think about it is just take whatever we put in the sales variance, in this case, we had the 5% globally.

That pretty much drops all the way down. That's sales, that's SG&A, that's operating income, that's EPS.

Because of the way our business is structured, it's very localized, and so our exposure to sales on translation is quite similar to our exposure to costs. So 5% would be that impact.

As far as other income, yeah, in the last few years, other income has been anywhere from $100 million to $200 million. I would expect this year for the full year will be on the lower end of that range.

To sort of characterize what is there, right, it is operating income. It is part of operations.

We tend to put things there that usually are settlements, could be time lags, could be gains, losses on sales of things. We put it there generally to isolate it so it doesn't get embedded into the sales and cost of goods sold from a trending perspective.

In this particular quarter, we had a gain on a sale, it was a cash gain, it was a real gain. That basically created that.

I don't expect very much in the next couple quarters, hence why I think the full year will probably be in the lower end of the range from the last couple years.

Great. Thank you very much, Matt.

Yep.

Thank you. Could I ask if Sanjiv is not available today, or is this the new format for the earnings calls?

John, yeah, if you may recall in the past, we've always kind of alternated, and sometimes Sanjiv would be on or Steve would be on or not, and we've kind of evolved to that. No, he's not on today, but he'll definitely be on in a future call.

I

wanted to make sure he knew he was missed. I'm a little confused about EMEA.

I thought the shortages from the Persian Gulf conflict were so severe that Europe was actually going to have to run at higher rates, even though it's higher cost, we're going to need most of the latent capacity in the world to run higher. Sounds like you're still expecting it to be soft in the June quarter in EMEA.

Let's start with, the guidance of what we said is no economic improvement at midpoint. That's just the baseline based on the guidance.

If you take that and extend it out, what it's implying is what we're seeing in Q1 just continues going forward. Whether or not it improves, we'll see.

From what we experienced in our EMEA in Q1 on the on-site and chemicals and energy on a year-over-year basis, we saw a decline based on the effects from those operating assets of the customers.

Thank you.

Yes, thank you, and good morning. Matt, just to follow up on the volume discussion, if I look at your Americas number of plus 2%, I think that's the best that you've posted since the third quarter of 2022, which is coincidentally when we tend to think of the onset of the industrial recession, certainly in the chemicals industry anyway.

I'm listening to you today talk about hardgoods up double digits, energy and chemicals trending for the better. Do you have enough confidence to say we're now on the cyclical upswing, or do you think there's too much war-related uncertainty and potential for an oil shock to start playing offense, if you will, in the Americas?

Kevin, I'll always remain a little guarded, right? I think I need to.

I sort of think about it as, we have an engine here with a few cylinders, right? One cylinder is Americas, one is APAC, and one is EMEA.

We're not running on all three cylinders. While the Americas, both results and trend, I think are positive, we're just not seeing that in EMEA, for example, today.

I think to see what I'd view as global recovery, I'd like to see all three running in the same direction. Time will tell how that ends up.

I feel in the Americas, and like you mentioned, the packaged gas is what we're seeing on some of the competitiveness in the US Gulf Coast, that does include commercial space, we expect that to continue to post some pretty good numbers. As far as are there offsets to that or not elsewhere in the world, that's the thing, the challenge that we need to see to kind of break out of this and start to see global positive volume.

I will say, the global basis, while we showed 1% global volume, which is mostly our project backlog contribution, we did turn positive on base volumes. It's just not positive enough to round to 1%, but it has started to turn positive.

We'll see if that trend continues and actually breaks out and rounds to a positive base volume. Right now, you're seeing puts and takes around the world, and we'll see if the comps lap to where that can be positive.

Thank you for that. Then wanted to follow up on helium as well.

I guess my simple question would be, how much incremental volume opportunity do you think may be available, again through long-term contracts that you're pursuing? Maybe could speak to your flexibility on sourcing and how much of an inventory cushion you may be able to take advantage of here?

We feel good about our sourcing, and we feel good about our capability to not only meet our current customer contractual commitments, but that we would have some excess molecules and assets to be able to deliver to future new customers. As far as how much, it's really just going to be a function of the extension of this situation and where it goes.

We will be selective. We want to make sure we get the right kind of contracts that make sense with the right kind of customers that we know will make that commitment to supply.

Time will tell. We've already been able to sign a few new long-term commitments, and we'll just have to see how it plays out over the next several quarters.

All right, thank you.

Good morning. Two quick ones.

Just first, are you seeing significant delays in projects where you're seeing kind of the CapEx decisions at least get delayed, even if the production rates are fairly stable? Secondly, if customers have to shut down capacity because of feedstock supply issues, whether government mandated or just they can't get the molecules, your contracts don't give them any adjustment for that.

They still need to pay you the same rate or pay the full exit penalty. Is that correct?

First on the delays. Just to segregate out, in our backlog, no concern, right?

What's in our project backlog right now is moving forward as expected, no concerns on that front. As far as potential new projects to be signed with customers' willingness to go to FID, essentially sign a contract, it depends on the end market.

I would say as you imagine, electronics, commercial space, you're seeing a continued very strong push to move forward with projects and investments. I think when you get to the more traditional industrial markets, it's really geographic specific right now.

I think in the US, there are a lot of interest for future investments. I think places like India, you're seeing some good, positive views, but in other parts of the world, not so much.

That's more of a geographic specific. As far as contracts, what it gets to is force majeure language.

This has been something you focus on heavily in any contractual business. We've worked and tested our force majeure language over many, many decades.

Economic is not a force majeure, as you can imagine. This is something that we always will work with our customers in these scenarios, but when we build these assets, we don't benefit when things go great, and in the same token, we don't take the downside when they don't.

From that perspective, we are well protected against any type of economic force majeure or other aspects of that, but it's really something that's going to be a contract-by-contract review.

Thank you.

Great, thanks for taking my question, and congrats on the results. Just quick question on the earnings algorithm.

If I heard you correctly, it sounded like FX was maybe 5% contribution to Q1 of that 10% that you saw. You're guiding to 7% to 9% for the year.

Do you expect FX would continue to play that contribution for the year's EPS? If you do fall short of your 10% goal, is there other actions you would consider getting up there, maybe increased buybacks or management actions or anything else that we should consider?

Thanks.

Arun, I think with the algo, as you well know, we have the management actions, we have the capital allocation, we have the macro. If you just take the macro in isolation, yes, we put a 1% FX tailwind in the assumption.

I will say, and as you probably well know, we based this number on sort of the 1st of month forwards, which is about a month old. Right now, spots are better, the foreign currencies strengthened since that time, so that would provide FX upside if these spots remained.

We can set that aside. As far as the management actions and the capital allocation, look, we know we need to get back to that 8% to 12% range excluding macro.

I think we had a little bit of a drag with helium for a period of time. We have about a percent or so drag just on the engineering business from its timing of projects, which is really more just a function of what is done as internal projects that's capitalized versus external projects for a profit.

We've got to get through those two, and I think that can get us back into that 8% to 12% range. We'll see.

Right now it's 7% to 9% kind of range we have out there, and we've got to work through to get higher than that, right, and we know that. That's how I would think about it, but the algo is still intact, and we will take incremental actions if we need to bridge this further to help get us back to that double-digit EPS growth.

Thanks.

Abby, once again, nice job. Thank you, everyone, for participating in today's call.

If you have any further questions, please feel free to reach out to me directly. Have a great day.