Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q2 2023 Earnings Presentation
23 slides from Air Products And Chemicals's earnings presentation, May 9, 2023
Slide 1: Creating Shareholder Value: Q2 FY23 Earnings Conference Call
Moving forward Creating Shareholder Value Q2 FY23 Earnings Conference Call May 9, 2023
Slide 2: Forward-looking statements; Non-GAAP financial measures
Moving forward Forward-looking statements This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about earnings guidance, business outlook and investment opportunities. These forward-look
Slide 3: Safety Results
Moving forward Safety Results Q2FY23 vs FY14 Q2FY23 FY14 Employee Lost Time Injury Rate 0.24 0.10 58% better Employee Recordable Injury Rate 0.58 0.32 45% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: Management Philosophy
Moving forward Management Philosophy • Our Goal: to be the safest, most diverse and most profitable industrial gas company in the world, providing excellent service to our customers • Creating Shareholder Value: cash is king; long-term increase in per share value of our stock; capital allocation is
Slide 5: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward Q2 FY23 Adjusted EPS* $2.74, up 17% vs. Last Year +10% to +12% $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 +17% $7.50 +8% $7.00 +2% $6.50 $6.00 +10% +18% $5.50 +12% $5.00 +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 (A) FY23(A)
Slide 6: Dividend History
Dividend History Moving forward 40+ consecutive years of dividend increases $7.00 $6.50 $6.00 $5.50 Dividend/Share* $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • Increased dividend to $1.75 per share, up 8% ($0.13 per share); announced in January 2023
Slide 7: Adjusted EBITDA Margin
Moving forward Adjusted EBITDA Margin* 44% 42.7% 41.9% 42% 40.1% 40.4% 40% 40.3% 40.3% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36.0% 36% 34.8% 34.9% 36.6% 35.8% 35.7% 34.6% 33.9% 34.1% 34.3% 33.9% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1%
Slide 8: Air Products' Position in the Energy Transformation to Hydrogen
Air Products’ Position in the Moving forward Energy Transformation to Hydrogen Gray Hydrogen Blue Hydrogen Green Hydrogen from Hydrocarbons from Hydrocarbons with CCS from Wind, Solar and Hydro Air Products is the Air Products will be the Air Products will be the Global Leader in Global Leader in Gl
Slide 9: Q2 Results
Q2 Results Moving forward Fav/(Unfav) vs. ($ million) Q2FY23 Q2FY22 Q1FY23 Sales $3,200 9% 1% - Volume 6% 3% - Price 8% -% - Energy cost pass-through (1%) (4%) - Currency (4%) 2% Adjusted EBITDA* $1,151 13% 6% - Adjusted EBITDA Margin* 36.0% 140bp 190bp Adjusted Operating Income* $645 15% (1%) - Adj
Slide 10: Q2 Adjusted EPS
Q2 Adjusted EPS* Moving forward Up 17% on strong operating performance Q2FY22 Q2FY23 Change GAAP EPS from cont. ops $2.38 $1.97 Non-GAAP items (0.04) 0.77 Adjusted EPS* $2.34 $2.74 $0.40 Volume 0.12 Price, net of variable costs 0.72 Other cost (0.44) $0.40 Currency ($0.09) Equity affiliates’ income
Slide 11: Cash Flow Focus
Moving forward Cash Flow Focus Strength and stability during challenging conditions Q2FY23 LTM ($ millions) Adjusted EBITDA* $4,460 Interest, net* (131) Cash Tax (519) Maintenance Capex* (658) Distributable Cash Flow* $3,152 $14.16/Share* Dividends (1,438) Investable Cash Flow* $1,714 • >$14/share o
Slide 12: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made; substantial investment capacity remaining Available Now (3/31/23) ($ Billion) Total Debt Capacity $ 13.4 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 6.3 Debt ($8.7B) minus cash1 ($2.4B) Additional Available Now $ 7.1 Est
Slide 13: Americas
Moving forward Americas Fav/(Unfav) vs. Q2FY23 Q2FY22 Q1FY23 Sales $1,373 16% (1%) - Volume 9% 2% - Price 8% 1% - Energy cost pass-through -% (4%) - Currency (1%) -% Adjusted EBITDA* $514 14% -% - Adjusted EBITDA Margin* 37.4% (50bp) 20bp Operating Income $324 18% (5%) - Operating Margin 23.6% 40bp
Slide 14: Asia
Moving forward Asia Fav/(Unfav) vs. Q2FY23 Q2FY22 Q1FY23 Sales $814 8% 5% - Volume 7% -% - Price 5% -% - Energy cost pass-through 3% 1% - Currency (7%) 4% Adjusted EBITDA* $350 9% 1% - Adjusted EBITDA Margin* 43.0% 20bp (140bp) Operating Income $233 14% (1%) - Operating Margin 28.6% 150bp (170bp) Ve
Slide 15: Europe
Moving forward Europe Fav/(Unfav) vs. Q2FY23 Q2FY22 Q1FY23 Sales $753 2% (5%) - Volume 3% 3% - Price 11% (1%) - Energy cost pass-through (6%) (12%) - Currency (6%) 5% Adjusted EBITDA* $251 32% 21% - Adjusted EBITDA Margin* 33.3% 760bp 710bp Operating Income $173 49% 19% - Operating Margin 23.0% 720b
Slide 16: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q2FY23 Q2FY22 Q1FY23 Sales $45 $16 $3 Operating Income $1 ($4) ($5) Equity Affiliates’ Income $99 $28 $35 Adjusted EBITDA* $107 $24 $29 • Sales increased due to stronger base volume • Higher maintenance activities negatively impacted operating incom
Slide 17: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q2FY23 Q2FY22 Sales $215 ($24) Adjusted EBITDA* ($71) ($46) Operating Income ($86) ($48) • Sales and profit lower on reduced sale of equipment activity • Additional resources to support growth strategy • New LNG sale of equipment projects 17 * Non-G
Slide 18: Outlook
Moving forward Outlook* Q3 FY23 FY23 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $2.85 to $2.95 +10% to +14% $11.30 to $11.50 +10% to +12% FY23 Capital Expenditures* $5.0 - $5.5 billion *Non-GAAP financial measure. Fiscal year 2022 comparisons have been updated to reflect adjustment for
Slide 19: Our Competitive Advantage
Moving forward Our Competitive Advantage The only sustainable element of long-term competitive advantage is the degree of commitment and motivation of the people in the enterprise 19
Slide 20: Appendix slides
Appendix slides 20
Slide 21: Major Projects
Major Projects Moving forward Plant Customer/Location Project Size Est. Timing Market ONSTREAM (last five quarters) ASU/Liquid Eastman, Kingsport, Tennessee Not disclosed FY22 Gasif/Merchant ASU/Gasifier/ AP / ACWA / SA / APQ – Jazan, ~$12 billion total JV FY23 Gasif to Refinery Power Saudi Arabia –
Slide 22: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2023 $5.0 - $5.5 billion# 2022 $4,650 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY23 $MM Q1 $725 Q2 $1,693 Q3 Q4 YTD $2,418 Capital expenditures are calculated independently for each quarter and may not sum to full y
Slide 23: Thank you
Moving forward Thank you tell me more
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