Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q3 2024 Earnings Presentation
25 slides from Air Products And Chemicals's earnings presentation, Aug 1, 2024
Slide 1: Creating Shareholder Value: Third Quarter 2024 Earnings Results
Moving forward Creating Shareholder Value Third Quarter 2024 Earnings Results Teleconference August 1, 2024
Slide 2: Forward-Looking Statements and 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 Q3 FY24 FY14 % Change YTD Employee Lost Time Injury Rate 0.24 0.07 71% better Employee Recordable Injury Rate 0.58 0.25 57% 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: Third Quarter Update
Moving forward Third Quarter Update • Q3 adjusted EPS* of $3.20 - Exceeded previous guidance range - Up 7% vs. prior year on strong results in Americas and Europe segments - Continued focus on pricing and productivity • Continue to execute the two-pillar growth strategy *Non-GAAP financial measure.
Slide 6: Outlook
Moving forward Outlook* Q4 FY24 FY24 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $3.33 to $3.63 +6% to +15% $12.20 to $12.50 +6% to +9% Expect FY24 capital expenditures* of $5 to $5.5 billion *Non-GAAP financial measure. See website for reconciliation. 6
Slide 7: Milestones in Executing Our Strategy
Moving forward Milestones in Executing Our Strategy • Signed Green Hydrogen Off-take with TotalEnergies - Large-scale, long-term - Validates our long-term strategy and demonstrates strong demand for green hydrogen • Divestment of LNG Process Technology and Equipment business1 - ~$1.8B all cash trans
Slide 8: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward Delivering double-digit, long-term EPS growth $13.50 $13.00 +6% to 9%(A) $12.50 $12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 +12% $8.50 +17% $8.00 $7.50 +8% $7.00 +2% $6.50 $6.00 +10% +18% $5.50 $5.00 +12% +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY1
Slide 9: Dividend History
Dividend History Moving forward 40+ consecutive years of dividend increases $7.50 $7.00 $6.50 $6.00 Dividend/Share* $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 • Increased dividend to $1.77 per share as announced in January 2024 • ~$1.6 bill
Slide 10: Adjusted EBITDA Margin
Moving forward Adjusted EBITDA Margin* 44% 42.7% 42.4% 41.9% 42% 40.9% 40.1% 40.4% 39.8% 39.5% 40% 40.3% 40.3% 39.2% 37.7% 39.2% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36.0% 36% 34.8% 34.9% 36.6% 35.8% 35.7% 34.6% 33.9% 34.1% 34.3% 33.9% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 2
Slide 11: Q3 Results
Q3 Results Moving forward Fav/(Unfav) vs. ($ million) Q3FY24 Q3FY23 Q2FY24 Sales $2,986 (2%) 2% - Volume -% 4% - Price 1% -% - Energy cost pass-through (1%) (2%) - Currency (2%) -% Adjusted EBITDA* $1,267 5% 6% - Adjusted EBITDA Margin* 42.4% 260bp 150bp Adjusted Operating Income* $738 5% 6% - Adjus
Slide 12: Q3 Adjusted EPS
Q3 Adjusted EPS* Moving forward Q3FY23 Q3FY24 Change GAAP EPS from cont. ops $2.67 $3.13 Non-GAAP items 0.30 0.07 Adjusted EPS* $2.98 $3.20 $0.22 Volume 0.05 Price, net of variable costs 0.16 Other cost (0.04) $0.17 Currency ($0.04) Equity affiliates’ income 0.01 Interest expense (0.03) Non-op. inco
Slide 13: Results by Business Segment
Moving forward Results by Business Segment Q3 Comparison vs. Prior Year – Price +3% (Merchant price +7%) – Weak merchant volume, strong H2 MIDDLE – Unfavorable merchant price AMERICAS demand and volume EAST & – Adjusted EBITDA* up primarily price INDIA – EAI lower due to higher costs – Higher planne
Slide 14: 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 14
Slide 15: Appendix slides
Appendix slides 15
Slide 16: Americas
Moving forward Americas Fav/(Unfav) vs. Q3FY24 Q3FY23 Q2FY24 Sales $1,235 (2%) (1%) - Volume (1%) 3% - Price 3% -% - Energy cost pass-through (3%) (4%) - Currency (1%) -% Adjusted EBITDA* $604 6% 2% - Adjusted EBITDA Margin* 48.9% 390bp 150bp Operating Income $391 4% 5% - Operating Margin 31.7% 200b
Slide 17: Asia
Moving forward Asia Fav/(Unfav) vs. Q3FY24 Q3FY23 Q2FY24 Sales $790 (4%) 1% - Volume (1%) 2% - Price -% -% - Energy cost pass-through 1% -% - Currency (4%) (1%) Adjusted EBITDA* $324 (9%) (1%) - Adjusted EBITDA Margin* 41.1% (220bp) (100bp) Operating Income $200 (17%) (2%) - Operating Margin 25.3% (
Slide 18: Europe
Moving forward Europe Fav/(Unfav) vs. Q3FY24 Q3FY23 Q2FY24 Sales $693 (2%) 4% - Volume 1% 4% - Price -% -% - Energy cost pass-through (2%) -% - Currency (1%) -% Adjusted EBITDA* $283 12% 7% - Adjusted EBITDA Margin* 40.8% 490bp 130bp Operating Income $205 16% 2% - Operating Margin 29.5% 460bp (60bp)
Slide 19: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q3FY24 Q3FY23 Sales $33 ($7) Operating Income ($1) ($7) Equity Affiliates’ Income $89 ($6) Adjusted EBITDA* $95 ($14) • Unfavorable merchant volume and price drove sales and operating income lower • Equity affiliates’ income lower due to higher cost
Slide 20: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q3FY24 Q3FY23 Sales $235 $31 Adjusted EBITDA* ($40) $39 Operating Income ($57) $37 • Higher LNG and other sale of equipment activities drove sales and profits 20 * Non-GAAP financial measure. See website for reconciliation.
Slide 21: Major Project Commitments
Major Project Commitments Moving forward Expect strong pipeline of growth projects to extend leadership position in low- and zero-carbon hydrogen Plant Customer/Location Supply Mode/Off-take Key Investment Recently Onstream Attributes ASU/Gasifier/Power Aramco/Jazan, Saudi Arabia On-site/Long Term •
Slide 22: Cash Flow Focus
Cash Flow Focus Moving forward Supports dividend and capital deployment ($ million) Q3FY24 LTM Adjusted EBITDA* $4,899 Interest, net* (255) Cash Tax (660) Maintenance Capex* (778) Distributable Cash Flow* $3,206 $14.39/Share* Dividends (1,560) Investable Cash Flow* $1,646 • >$14/share of distributab
Slide 23: FY24-33 Capital Deployment
Moving forward FY24-33 Capital Deployment Significant investment capacity & backlog to support growth 10-Year Capital Deployment Outlook Assumes 3.0x LTM Adjusted EBITDA* less net debt* as of Current Additional Debt Capacity $ 5.6 Q3 FY24 Future Investable Cash Flow*1 16.5 Cumulative Investable Cash
Slide 24: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2024 $5 - $5.5 billion# 2023 $5,224 2022 $4,650 2021 $2,551 2020 $2,717 2019 $2,129 FY24 $MM Q1 $1,386 Q2 $1,285 Q3 $1,205 Q4 YTD $3,876 Capital expenditures are calculated independently for each quarter and may not sum to full year amount due to rounding.
Slide 25: Thank you
Moving forward Thank you tell me more
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