Air Products And Chemicals, Inc. · NYSE:APD

Air Products And Chemicals — Q4 2008 Earnings Presentation

24 slides from Air Products And Chemicals's earnings presentation, Oct 22, 2008

  1. Slide 1: Q4 FY08 Earnings Conference Call

    Q4 FY08 Earnings Conference Call October 22, 2008

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements NOTE: This presentation contains “forward-looking statements” based on management’s reasonable expectations and assumptions as of the date of this document. Events or results described in forward-looking statements may be influenced by many factors not anticipated by manag

  3. Slide 3: Fiscal Year 2008: Fifth Year of Double-Digit Growth

    Fiscal Year 2008: Fifth Year of Double-Digit Growth* Continuing Operations Growth vs. PY ($Millions) FY07 FY08 $∆ %∆ Sales $9,148 $10,415 $1,267 14% Operating Income 1,358 1,522 164 12% Operating Margin 14.8% 14.6% (20bp) Equity Affiliates Inc. 114 145 31 27% Net Income 953 1,107 154 16% EPS ($/shar

  4. Slide 4: Consolidated Q4 Financials

    Consolidated Q4 Financials Fav/(Unfav) vs. ($Millions, Continuing Operations) Q4 FY08 Q4 FY07 Q3 FY08 Sales $2,715 14% (1%) SG&A as a % of Sales 10.1% 80bp 20bp Operating Income $373 3% (5%) Operating Margin % 13.7% (160bp) (60bp) Net Income $273 7% (7%) Diluted EPS $1.26 10% (7%)  Plant fire & hur

  5. Slide 5: EPS up 10%

    EPS up 10% Q4 FY08 Q4 FY07 Change As-reported diluted EPS $1.21 $1.31 - Discontinued Operations 0.05 0.01 - PY disclosed items (gain) -- (0.17)* Adjusted Cont. Ops. EPS $1.26 $1.15 $0.11 Volume $0.06 Price / raw materials Cost Currency/FX 0.03 (0.03) 0.07 } $0.06 Plant fire and hurricanes (0.10) Low

  6. Slide 6: Merchant Gases

    Merchant Gases Fav/(Unfav) vs. Q4 FY08 Q4 FY07* Q3 FY08 Sales $1,095 15% 1% - Volume 4% 1% - Price 6% 2% - Currency 5% (2%) Operating Income $196 12% (4%) Operating Margin 17.9% (50bp) (90bp)  Volume growth in all regions  Solid pricing gains 6 * Comparison excludes PY sale/donation gain, see appe

  7. Slide 7: Merchant Gases: Q4 Sales Analysis vs PY

    Merchant Gases: Q4 Sales Analysis vs PY North America Europe Asia Sales % change 14% 17% 12% - Volume 5% 4% 4% - Price 9% 5% 5% - Currency - 8% 3%  Europe now includes homecare business 7

  8. Slide 8: Tonnage Gases

    Tonnage Gases Fav/(Unfav) vs. Q4 FY08 Q4 FY07* Q3FY08 Sales $940 21% (4%) - Volume (excl. hurricanes) 1% 2% - Hurricane impact (6%) (5%) - Nat’l gas/RM pass thru 25% - - Currency 1% (1%) Operating Income $135 14% 7% Operating Margin 14.3% (90bp) 140bp  Higher natural gas pricing suppresses margins

  9. Slide 9: Electronics & Performance Materials

    Electronics & Performance Materials Fav/(Unfav) vs. Q4 FY08 Q4 FY07 Q3 FY08 Sales $553 6% (5%) - Volume 3% (5%) - Price 2% 1% - Currency 1% (1%) Operating Income $42 (31%) (40%) Operating Margin 7.6% (400bp) (450bp)  Electronics sales (1%) (9%)  Plant fire / soft volumes  Performance Materials vo

  10. Slide 10: Equipment & Energy

    Equipment & Energy Fav/(Unfav) vs. Q4 FY08 Q4 FY07 Q3 FY08 Sales $126 2% 18% Operating Income $16 (12%) Sales Backlog $399 54% 75%  Sequential profit improvement driven by favorable cost performance  Backlog increases on two new LASU orders 10

  11. Slide 11: FY09 Full-Year Outlook

    FY09 Full-Year Outlook  FY09 overall… expect more  FY’08 Adjusted Diluted EPS $5.05 modest and slowing growth – Merchant pricing  WW manufacturing growth – Tonnage loading – Globally 1% to 2% – E&E less favorable mix – U.S. and Europe both – E&PM challenging end markets contract (1%) to (2%) – Pr

  12. Slide 12: FQ1 '09 Outlook

    FQ1 ’09 Outlook } FQ4 2008 EPS $1.26  Higher Merchant pricing  Less impact from Q4 plant fire & hurricanes EPS  Improved cost performance }  Seasonality/outage costs  Lower Equipment & Energy results EPS  Higher tax rate, 25.5% FY’09  Currency/FX FQ1 2009 EPS $1.15 - $1.21 12 *Continuing Oper

  13. Slide 13: Capital Spending Outlook

    Capital Spending Outlook FY09 Forecast Total $1.6-$1.8B 13

  14. Slide 14: Appendix slides

    14 Appendix slides ae

  15. Slide 15: Appendix: FY 2008 Sales Analysis

    Appendix: FY 2008 Sales Analysis Change versus FY2007 Total Consolidated 14% Comprised of:  Base business growth 4% – Volume 4% – Energy & Equip segment (2%) – Price 2%  Acquisitions/Divest. 1%  Nat’l gas/RM pass thru 5%  Currency 4% 15

  16. Slide 16: Appendix: Q4 Sales Analysis

    Appendix: Q4 Sales Analysis Change versus Q4 FY07 Q3 FY08 Total Consolidated 14% (1%) Comprised of:  Base business growth 3% - – Volume 2% 1% – Hurricane impact (2%) (2%) – Price 3% 1%  Acquisitions/Divest. - -  Nat’l gas/RM pass thru 8% -  Currency 3% (1%) 16

  17. Slide 17: FY 2007 Q4 Items

    FY 2007 Q4 Items Operating Net ($Millions, except per share amounts) Income Income EPS Q4 FY07 GAAP $380.4 $292.8 $1.31 Adjustments: Loss from discontinued ops -- 2.8 0.01 PUI contract settlement gain (36.8) (23.6) (0.11) Investment sale & donation (5.0) (19.8) (0.09) Supp. pension plan charge 10.3

  18. Slide 18: Appendix Full Year FY2008 Comparisons

    Appendix Full Year FY2008 Comparisons FY08 FY07 Operating Operating Cont Ops Operating Operating Cont Ops Sales Income Margin Income EPS Sales Income Margin Income EPS GAAP Measure $10,414.5 $1,495.8 14.4% $1,090.5 $4.97 $9,148.2 $1,375.6 15.0% $1,019.6 $4.57 Gain on contract settlement ($36.8) ($23

  19. Slide 19: Appendix Q4 FY2008 Comparisons

    Appendix Q4 FY2008 Comparisons Q408 Q407 Operating Operating Cont Ops Operating Operating Cont Ops Sales Income Margin Income EPS Sales Income Margin Income EPS GAAP Measure $2,714.7 $373.1 13.7% $273.4 $1.26 $2,371.3 $380.4 16.0% $295.6 $1.32 Gain on contract settlement ($36.8) ($23.6) ($0.11) Glob

  20. Slide 20: Appendix: Segment Results

    Appendix: Segment Results FY07 Q4 Proforma Non GAAP Q408 FY08 Q4 GAAP Adjustment (1) Non GAAP vs. FY07 Q4 Merchant Gases Sales 1,095.0 948.9 948.9 Operating Income 196.2 179.6 (5.0) 174.6 12% Operating Margin 17.9% 18.9% 18.4% (50bp) Tonnage Gases Sales 940.3 775.7 775.7 Operating Income 134.9 155.0

  21. Slide 21: Appendix: ROCE

    Appendix: ROCE $ Millions Quarter Ended Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Numerator Operating Income Reported 321.6 313.6 360.0 380.4 380.4 348.6 393.7 373.1 Equity Affiliate Income 27.3 27.5 29.5 30.1 25.3 42.4 46.5 30.8 Earnings before tax as reported 348.9 341.1 389.5 410.5 405.7 391.0

  22. Slide 22: Appendix: ROCE Tax Rate

    Appendix: ROCE Tax Rate Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Reported Income from Cont. Ops. Bef. Tax and Min. Int 309.9 303.9 345.4 368.4 364.9 352.1 400.7 361.1 Minority Interest (5.1) (4.4) (5.1) (6.2) (6.1) (4.5) (7.6) (4.8) Income from Cont. Ops. Before Tax 304.8 299.5 340.3 362.2 358.8 347.

  23. Slide 23: Appendix FY2009 Guidance

    Appendix FY2009 Guidance EPS EPS FY2009 Guidance $5.10-$5.35 FY2008 GAAP $4.97 % Change GAAP 3%-8% FY2009 Guidance $5.10-$5.35 FY2008 Non-GAAP (1) $5.05 % Change Non-GAAP 1%-6% (1) See previous appendix for non-GAAP FY2008 EPS reconciliation CAPITAL EXPENDITURES YTD YTD 2008 2009 Billions of dollars

  24. Slide 24: Thank you

    Thank you tell me more www.airproducts.com 24

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