Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Jefferies 6th Annual Global Industrial and A&D Conference 2010
26 slides from Air Products And Chemicals's conference presentation, Aug 10, 2010
Slide 1: John McGlade, Chairman, CEO and President
John Mc Glade Chairman, CEO and President Jefferies 6th Annual Global Industrial and A&D Conference August 10, 2010
Slide 2: Forward Looking Statement
Jefferies 6th Annual Global Industrial and A&D Conference Forward Looking Statement This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance and comments regarding the Company’s prop
Slide 3: Additional Information
Jefferies 6th Annual Global Industrial and A&D Conference ADDITIONAL INFORMATION On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common
Slide 4: Financial Performance
Jefferies 6th Annual Global Industrial and A&D Conference Financial Performance* 17% 17% 16% 16% 15% Op Margin 15% 14% 14% ROCE 13% 13% 12% 12% 11% 11% 10% 10% 9% 9% FY04 FY08 Q109 Q209 Q309 Q409 Q110 Q210 Q310 4 * non-GAAP, see appendix for reconciliation
Slide 5: Air Products Supply Modes: Durable Business Models
Jefferies 6th Annual Global Industrial and A&D Conference Air Products Supply Modes Durable Business Models Onsite/Pipeline Equipment & 37% Services 14% Package Gases Liquid/Bulk & Specialty Materials 24% 25% 5
Slide 6: We have Multiple Growth Opportunities
Jefferies 6th Annual Global Industrial and A&D Conference We have Multiple Growth Opportunities Energy Environment Emerging Markets Hydrogen for refining Oxyfuel Electronics across Asia Oxygen for gasification Carbon capture Equity Affiliate positions LNG heat exchangers Multiple Gas
Slide 7: Merchant Gases: Strong growth in Asia
Jefferies 6th Annual Global Industrial and A&D Conference Merchant Gases Strong growth in Asia China Liquid Share 2009 - Majors • Largest Liquid/Bulk Share in Competitor 4 Air Products 15% China among global majors Competitor 3 31% 16% • Leading Merchant Gases Competitor 1 supplier in India 20% Comp
Slide 8: Merchant Gases: Applications Driven Growth
Jefferies 6th Annual Global Industrial and A&D Conference Merchant Gases Applications Driven Growth Cleanfire® HRi™ Efficient oxygen burner plant design A winning combination! 8
Slide 9: Tonnage Gases: Leading Global Hydrogen Positions
Jefferies 6th Annual Global Industrial and A&D Conference Tonnage Gases Leading Global Hydrogen Positions Edmonton, Canada Sarnia, Canada Southern California Texas Rotterdam Louisiana 9
Slide 10: Tonnage Gases: Significant New Markets for Oxygen
Jefferies 6th Annual Global Industrial and A&D Conference Tonnage Gases Significant New Markets for Oxygen •Steel −Asian infrastructure growth −Mill modernization •Gasification −Power −Feedstock independence −Low BTU hydrocarbons •Cleaner coal −Power −CO2 capture 200,000-300,000 tons-per-day new oxy
Slide 11: Tonnage Gases: Asian Growth Accelerating
Jefferies 6th Annual Global Industrial and A&D Conference Tonnage Gases Asian Growth Accelerating Superior North America & Europe returns: • Marathon Garyville • Marathon Detroit Continuous • XOM Baton Rouge • Monsanto Louisiana improvement • Total Port Arthur • Granite City, IL ASU • XOM Baytown •
Slide 12: Electronics: Strong Recovery Continues
Jefferies 6th Annual Global Industrial and A&D Conference Electronics Strong Recovery Continues • Solid growth in existing and new markets 200% PV – IC silicon (MSI) = 13% LED – TFT-LCD = 20% TFT-LCD Silicon (MSI) – PV = 30% 100% – LED = 14% (‘09 to ‘13 CAGR) 0% 2009 2010 2011 2012 2013 • Majority m
Slide 13: Equity Affiliates: Important Source of Growth
Jefferies 6th Annual Global Industrial and A&D Conference Equity Affiliates Important Source of Growth Italy Mexico India Thailand South Africa 13
Slide 14: Outlook
Jefferies 6th Annual Global Industrial and A&D Conference Outlook Q4 FY’10 EPS $1.27-$1.33* Continued recovery/loading Higher Electronics & Perf Materials results FY’10 EPS $4.94-$5.00* CapEx forecast unchanged, ~$1.3B to $1.5B Tax rate guidance unchanged, ~25%-26% Currency headwind 14 * n
Slide 15: Offer to Acquire Airgas
Offerto Acquire Airgas AIR _/. PRODUCTS £2:
Slide 16: Airgas transaction highlights
Jefferies 6th Annual Global Industrial and A&D Conference Airgas transaction highlights Consideration All-cash offer for all Airgas shares at $63.50 per share Premium Premium of 46% to ARG unaffected price on 2/04/10 of $43.53 Accretion Expected to be substantially accretive to Air Products cash EPS
Slide 17: Compelling strategic and industrial logic
Jefferies 6th Annual Global Industrial and A&D Conference Compelling strategic and industrial logic Creates one of the world’s leading integrated industrial gas companies • Largest industrial gas company in North America • Diversified across geographies and distribution channels with competitive pos
Slide 18: Air Products' proposals
Jefferies 6th Annual Global Industrial and A&D Conference Air Products’ proposals 1. Election of three independent director nominees 2. Amend by-laws to implement director eligibility requirements • Would make any Airgas board members (except CEO) not elected at annual meeting ineligible to serve on
Slide 19: Path forward
Jefferies 6th Annual Global Industrial and A&D Conference Path forward Tender offer • Revised offer effective July 8th • Offer scheduled to expire on Friday, August 13th • Financing fully committed Air Products Shareholder meeting committed to • Scheduled on September 15th • 3 independent BOD nomine
Slide 20: The Air Products opportunity
Jefferies 6th Annual Global Industrial and A&D Conference The Air Products opportunity STABILITY GROWTH RESULTS • Long term contracts, • Solid backlog and • Double-digit EPS growth consistent and strong growth predictable cash flow opportunities across all • ROCE 3-5% above cost of geographies capit
Slide 21: Thank you
Thank you www.airproducts.com
Slide 22: Non GAAP Appendix: FY04 and FY08 Operating Margin
Jefferies 6th Annual Global Industrial and A&D Conference Non GAAP Appendix: FY04 and FY08 Operating Margin ($ Millions) GAAP Measure Non GAAP Ajusts. Non GAAP Measure FY04 and FY08 - Total Co. FY04 FY08 FY04 (1) FY08 (2) FY04 FY08 Sales 6,163.2 10,414.5 6,163.2 10,414.5 Operating Income 836.9 1,495
Slide 23: Non GAAP Appendix: ROCE FY04 and FY08
Jefferies 6th Annual Global Industrial and A&D Conference Non GAAP Appendix: ROCE FY04 and FY08 $ Millions FY04 FY08 Quarter Ended Q403 Q104 Q204 Q304 Q404 Q407 Q108 Q208 Q308 Q408 Numerator Operating Income Reported 181.7 200.2 231.3 223.7 380.4 348.6 393.7 373.1 Equity Affiliate Income 17.8 19.2 1
Slide 24: Non GAAP Appendix: ROCE Tax Rate FY04 and FY08
Jefferies 6th Annual Global Industrial and A&D Conference Non GAAP Appendix: ROCE Tax Rate FY04 and FY08 Q104 Q204 Q304 Q404 Q108 Q208 Q308 Q408 Reported Income from Cont. Ops. Bef. Tax 169.0 187.6 221.8 217.6 364.9 352.1 400.7 361.1 Noncontrolling Interest (1.9) (4.1) (3.3) (2.5) (6.1) (4.5) (7.6)
Slide 25: Appendix: ROCE Q109 through Q310
Jefferies 6th Annual Global Industrial and A&D Conference Appendix: ROCE Q109 through Q310 $ Millions Quarter Ended Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Numerator Operating Income Reported 114.1 260.4 143.8 328.0 345.0 340.6 336.4 Equity Affiliate Income 24.5 27.0 28.5 32.2 26.9 32.2 32.5 Earning
Slide 26: Appendix: ROCE Tax Rate Q109 through Q310
Jefferies 6th Annual Global Industrial and A&D Conference Appendix: ROCE Tax Rate Q109 through Q310 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Reported Income from Cont. Ops. Bef. Tax 102.1 257.4 144.8 332.3 340.3 343.3 338.9 Noncontrolling Interest (5.0) (1.6) (4.8) - (5.0) (6.4) (8.1) Income from Cont. Op
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