Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Morgan Stanley Global Basic Materials Conference (February 2010)
34 slides from Air Products And Chemicals's conference presentation, Feb 25, 2010
Slide 1: Morgan Stanley Global Basic Materials Conference
Morgan Stanley Global Basic Materials Conference Paul Huck, Senior Vice President and CFO February 25, 2010
Slide 2: Additional Information
Morgan Stanley Global Basic Materials Conference Additional Information • On February 11, 2010, Air Products Distribution, Inc., a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, Inc
Slide 3: Certain Information Regarding Participants
Morgan Stanley Global Basic Materials Conference Certain Information Regarding Participants • Air Products and certain of its respective directors and executive officers may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain information r
Slide 4: Forward-Looking Statements
Morgan Stanley Global Basic Materials Conference Forward-Looking Statements • Note: This contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance and projections of the results of the Company’s propos
Slide 5: Offer to Acquire Airgas
Offer to Acquire Airgas
Slide 6: Airgas transaction highlights
Morgan Stanley Global Basic Materials Conference Consideration All-cash offer for all Airgas shares at $60.00 per share Premium Premium of 38% to Airgas’ closing price on 2/04/10 of $43.53 Accretion Expected to be substantially accretive to Air Products cash EPS in year one Synergies Substantial cos
Slide 7: Compelling strategic and industrial logic
Morgan Stanley Global Basic Materials 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 positions in
Slide 8: Airgas at a glance
Morgan Stanley Global Basic Materials Conference Revenue (FY2009) $4.3B Total CAGR (over last 5 years) 19% Same Store Sales Growth 7% Airgas at a glance Broad Coverage - 1,500 Sales Representatives Industries Served Source: Based on Airgas public disclosures
Slide 9: A world leading integrated industrial gas company
Morgan Stanley Global Basic Materials Conference Pro-forma Air Products Airgas Revenues (1) Air Products Revenues A world leading integrated industrial gas company (1) Source: Based on Airgas public disclosures Packaged Gas 90% Liquid/Bulk 10% Pro-forma Air Products Airgas Revenues (1) Air Products
Slide 10: Benefits of an integrated industrial gas company
Morgan Stanley Global Basic Materials Conference Mode of supply Integration benefit Benefits of an integrated industrial gas company Liquid/Bulk Tonnage/Onsites • Co-product economics • Liquid back-up • Sales coverage • Product supply/outlet • Broader scope of industries served • Brand recognition C
Slide 11: Synergies
Morgan Stanley Global Basic Materials Conference Synergies Supply Chain • Consolidate filling locations • Consolidate specialty gas plant locations • Move from local delivery to hub and spoke • Combine purchasing requirements • Utilize Shared Services for Packaged Gas operations and Product Manageme
Slide 12: Growth acceleration
Morgan Stanley Global Basic Materials Conference Growth acceleration • New Offerings for US Packaged Gases − Integra ® cylinders − 300 BAR cylinders • Further expand Air Products’ offerings into key industries − Fabrication - Analytical − Construction - Medical − Pharmaceuticals - Food and Beverage
Slide 13: North America remains a major growth area
Morgan Stanley Global Basic Materials Conference GDP 2009 2013 Growth '09-'13 CAGR World 49.1 55.9 6.8 3.3% North America 15.0 16.9 1.9 3.0% Europe 16.6 17.9 1.3 1.9% Asia ex. Japan 8.3 10.7 2.4 6.6% Japan 4.5 4.8 0.3 1.7% Rest of World 4.7 5.6 0.9 4.4% North America remains a major growth area GDP
Slide 14: Key measures
Morgan Stanley Global Basic Materials Conference Key measures • Transaction accretive in the first year • Solid shareholder value • Excludes transaction and integration costs • Synergies enable greater cash flow generation • Combination provides for significant margin benefits Accretion/Dilution EBI
Slide 15: Path forward
Morgan Stanley Global Basic Materials Conference Path forward . . . Air Products committed to completing the transaction Litigation • Commenced litigation in Delaware Tender offer • Offer commenced Feb 11 • Financing committed Regulatory process • Prepared to make appropriate divestitures Proxy cont
Slide 16: Air Products Financial Performance
Morgan Stanley Global Basic Materials Conference FY04 thru FY08 H109 H209 Q110 Sales ( CAGR/ % chg vs PY ) 14% (16%) (25%) (1%) Operating Margin * 12.8% 1.8% 14.6% 13.2% 15.5% 15.9% EPS Cont Ops.* 21% (24%) (16%) 20% ROCE (4 quarter trailing) * 9.6% 3.4% 13.0% ROCE (instantaneous) * 10.0% 11.2% 11.7
Slide 17: We have Multiple Growth Opportunities
Morgan Stanley Global Basic Materials Conference We have Multiple Growth Opportunities l Hydrogen for refining l Oxygen for gasification l LNG heat exchangers Energy Environment Emerging Markets l Oxyfuel l Carbon capture l Multiple Gas Applications l Electronics across Asia l Equity Affiliate posit
Slide 18: Applications Driven Growth: a winning combination
Morgan Stanley Global Basic Materials Conference Cleanfire ® HR i ™ burner Efficient oxygen plant design Merchant Business Applications Driven Growth A winning combination!
Slide 19: Merchant Business Winning New Customers with Industrial Gases
Morgan Stanley Global Basic Materials Conference Merchant Business Winning New Customers with Industrial Gases Integra ® Cylinders
Slide 20: Hydrogen Still Fueling Future Growth
Morgan Stanley Global Basic Materials Conference Refinery Conversion Low-Conversion Refinery H 2 scf/ bbl 0 - 150 Sulfur spec. None High-Conversion Refinery - -1000 + <30 to <15 ppm s Other 20% Residual Fuel 34% Other 17% Residual fuel 1% Transportation Fuel 46% Transportation Fuel 82% Conversion 45
Slide 21: Oxygen growth drivers: steel, gasification, cleaner coal
Morgan Stanley Global Basic Materials Conference • 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 oxygen capacity by 2018 100 + new plants
Slide 22: Projected tonnage projects and superior returns
Morgan Stanley Global Basic Materials Conference Projected • Marathon Garyville • XOM Baton Rouge • Total Port Arthur • XOM Baytown • MarkWest Texas Projected 2011-2012 • XOM Rotterdam • Shell Rotterdam • Marathon Detroit • Monsanto Louisiana Continuous improvement Operating bonuses Base take or pay
Slide 23: Significant Opportunity in Thin-Film PV
Morgan Stanley Global Basic Materials Conference Electronics Significant Opportunity in Thin-Film PV • Flat panel experience = differentiated advantage in thin film technologies • Comprehensive offerings and turnkey solutions through SunSource™ Solutions portfolio GW facility = $100 + MM in annual r
Slide 24: Equity Affiliates Important Source of Growth
Morgan Stanley Global Basic Materials Conference Equity Affiliates Important Source of Growth Mexico Italy India South Africa Thailand
Slide 25: FY'10 Full Year Outlook Update
Morgan Stanley Global Basic Materials Conference wth vs PY ● FY’10 overall… expecting a gradual and modest recovery ● WW manufacturing growth – Globally up 1% to 2% – US flat to up modestly – EU down 1% – Asia up 8% to 9% ● Silicon growth 20% to 25% ● Capex forecast unchanged – ~$1.3B to $1.5B Compa
Slide 26: The Air Products Opportunity
Morgan Stanley Global Basic Materials Conference RESULTS • Double-digit EPS growth • ROCE 3-5% above cost of capital The Air Products Opportunity STABILITY • Long term contracts, consistent and predictable cash flow • Diversified across geographies and distribution channels • Airgas opportunity crea
Slide 27: Thank you
Thank you www.airproducts.com
Slide 28: Non GAAP Appendix - Year over Year Deltas
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - Year over Year Deltas
Slide 29: Non GAAP Appendix - Half Year Deltas
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - Half Year Deltas
Slide 30: Non GAAP Appendix - ROCE FY04 and FY08
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - ROCE FY04 and FY08
Slide 31: Non GAAP Appendix - ROCE Tax Rate FY04 and FY08
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - ROCE Tax Rate FY04 and FY08
Slide 32: Non GAAP Appendix - First/Second Half FY09 and Q1 FY10
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - First/Second Half FY09 and Q1 FY10
Slide 33: Non GAAP Appendix - ROCE Tax Rate FY09 and Q1 FY10
Morgan Stanley Global Basic Materials Conference Non GAAP Appendix - ROCE Tax Rate FY09 and Q1 FY10
Slide 34: Non-GAAP Appendix: FY10 Guidance
Morgan Stanley Global Basic Materials Conference Non-GAAP Appendix: FY10 Guidance ($ Millions, except per share data) FY10 Guidance vs. FY09 Diluted EPS Continuing Ops FY09 GAAP $3.00 FY09 Global Cost Reduction Plan $0.94 FY09 Pension Settlement $0.02 FY09 Customer Bankruptcy and Asset Actions $0.10
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