Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q2 2022 Earnings Presentation
31 slides from Air Products And Chemicals's earnings presentation, May 5, 2022
Slide 1: Create Shareholder Value: Q2 FY22 Earnings Conference Call
Moving forward Create Shareholder Value Q2 FY22 Earnings Conference Call May 5, 2022
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 Q2FY22 vs FY14 Q2FY22 FY14 Employee Lost Time Injury Rate 0.24 0.15 38% better Employee Recordable Injury Rate 0.58 0.44 24% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: Our Goal
Moving forward Our Goal Air Products will be the safest, most diverse and most profitable industrial gas company in the world, providing excellent service to our customers 4
Slide 5: Creating shareholder value
Moving forward Creating shareholder value Management philosophy Shareholder Cash is king; cash flow drives long-term value. Value What counts in the long term is the increase in per share value of our stock, not size or growth. CEO Capital allocation is the most important job of Focus the CEO. Opera
Slide 6: Five Point Plan: Moving Forward
Moving forward Five Point Plan: Moving Forward Sustain Deploy Evolve Change Belong the lead capital portfolio culture and Matter Safest, most Strategically invest Grow onsite 4S Inclusion diverse, and most significant available portion profitable capacity Best-in-class Win profitable Energy, Committ
Slide 7: Our Higher Purpose
Moving forward Our Higher Purpose Bringing people together to collaborate and innovate solutions to the world’s most significant energy and environmental sustainability challenges 7
Slide 8: New major Electronics project wins
Moving forward New major Electronics project wins Leadership positions serving semiconductor industry • Awarded major long-term supply agreement with a world-leading semiconductor manufacturer in Asia - $900 million investment • Onstream two new ASUs with a world-leading semiconductor manufacturer i
Slide 9: World Energy SAF project
Moving forward World Energy SAF project Customer: World Energy On-stream: 2025 Location: Paramount, California Contract: 25-year tolling agreement Scope: APD to build and own - APD receives feedstock and large-scale H2 and SAF production utilities from and supplies SAF to facility + pipeline connect
Slide 10: World Energy Overview
World Energy Overview Founded in 1998 in Boston, MA. Active leader and participant in all facets of the alternative liquid fuels Background business for over 20 years, including market development, manufacturing, feedstock procurement and development, product sales and construction. Gene Gebolys – C
Slide 11: FY23 major projects
Moving forward FY23 major projects Project Location AP Capex* Onstream Jiutai China ~$0.65 billion 1H FY23 Jazan Phase II Saudi Arabia ~$0.9 billion 1H FY23 Debang China ~$0.2 billion 2H FY23 GCA Texas ~$0.5 billion 2H FY23 Juitai 2019 Juitai today 11 *Represents AP share of equity investment
Slide 12: Air Products adjusted EPS
Moving forward Air Products adjusted EPS* $11.00 +13% to +15% $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $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 Guidance • Q2 FY22 adjusted EPS* of $2.38 up 14% vs. prior year 12 * Non-G
Slide 13: Dividend/Share
Dividend history Moving forward 40 consecutive years of dividend increases $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 • 8% or $0.12 per quarter dividend increase announced Feb 2022 (to $1.62 per quarter) • >$1.4B of divide
Slide 14: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward 44% 42.7% 41.9% 42% 40.1% 40.4% 40% 40.3% 40.3% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36% 34.8% 36.6% 34.9% 35.8% 35.7% 34.6% 33.9% 34.3% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% Q214 Q314 Q414 Q115
Slide 15: Q2 Results
Q2 Results Moving forward Fav/(Unfav) vs. ($ million) Q2FY22 Q2FY21 Q1FY22 Sales $2,945 18% (2%) - Volume 8% (3%) - Price 6% 1% - Energy cost pass-through 6% -% - Currency (2%) -% Adjusted EBITDA* $1,019 9% 2% - Adjusted EBITDA Margin* 34.6% (270bp) 110bp Adjusted Operating Income* $562 5% 7% - Adju
Slide 16: Q2 Adjusted EPS
Q2 Adjusted EPS* Moving forward Adjusted EPS* Up 14% vs. Prior Year Q2FY21 Q2FY22 Change GAAP cont ops EPS $2.13 $2.38 Less: non-GAAP items 0.04 0.00 Adjusted EPS* $2.08 $2.38 $0.30 Volume 0.18 Price (net of variable costs) 0.14 Other Cost (0.21) $0.11 Currency/FX ($0.01) Equity Affiliate Income 0.1
Slide 17: Cash flow focus
Moving forward Cash flow focus ($ million) Q2FY22 LTM Adjusted EBITDA* $4,039 Interest, net* (62) Cash Tax (397) Maintenance Capex* (761) Distributable Cash Flow* $2,819 $12.67/Share* Dividends (1,329) Investable Cash Flow* $1,490 • ~ $12.70/share of Distributable Cash Flow* • Paid over 45% of Distr
Slide 18: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made, substantial investment capacity remaining Available Now (3/31/22) ($Billion) Total Debt Capacity $ 12.1 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 4.2 Debt ($7.4B) minus cash1 ($3.2B) Additional Available Now $ 7.9 Esti
Slide 19: Asia
Moving forward Asia Fav/(Unfav) vs. Q2FY22 Q2FY21 Q1FY22 Sales $751 8% (4%) - Volume 6% (2%) - Price 1% (2%) - Energy cost pass-through 1% -% - Currency -% -% Adjusted EBITDA* $322 2% (5%) - Adjusted EBITDA Margin* 42.8% (240bp) (60bp) Operating Income $204 3% (8%) - Operating Margin 27.1% (140bp) (
Slide 20: Europe Energy Costs Up 4x – 5x
Europe Energy Costs Moving forward Up 4x – 5x Europe Power and Natural Gas Index (Jan21 = 100) 800 700 600 500 400 300 200 100 Power Natural Gas 0 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 • Natural gas and power passed-through in onsite
Slide 21: Europe
Moving forward Europe Fav/(Unfav) vs. Q2FY22 Q2FY21 Q1FY22 Sales $739 32% (1%) - Volume 2% (7%) - Price 14% 5% - Energy cost pass-through 24% 3% - Currency (8%) (2%) Adjusted EBITDA* $190 (3%) 17% - Adjusted EBITDA Margin* 25.7% (950bp) 380bp Operating Income $116 (12%) 17% - Operating Margin 15.8%
Slide 22: Americas
Moving forward Americas Fav/(Unfav) vs. Q2FY22 Q2FY21 Q1FY22 Sales $1,187 12% (3%) - Volume 6% (2%) - Price 5% 2% - Energy cost pass-through 2% (3%) - Currency (1%) -% Adjusted EBITDA* $449 -% (2%) - Adjusted EBITDA Margin* 37.9% (460bp) 60bp Operating Income $276 5% 3% - Operating Margin 23.2% (170
Slide 23: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q2FY22 Q2FY21 Q1FY22 Sales $29 $3 $5 Operating Income $5 ($2) $- Equity Affiliate Income $71 $55 ($21) Adjusted EBITDA* $83 $53 ($20) • Jazan joint venture delivering as expected – Increased EAI versus prior year – Decreased EAI versus prior quarter
Slide 24: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q2FY22 Q2FY21 Sales $240 $76 Adjusted EBITDA* ($25) $31 Operating Income ($38) $28 • Sales and profit higher on increased sale of equipment activity • LNG inquiries increasing 24 * Non-GAAP financial measure. See website for reconciliation.
Slide 25: Outlook
Moving forward Outlook* Q3 FY22 FY22 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $2.55 to $2.65 +10% to +15% $10.20 to $10.40 +13% to +15% FY22 Capital Expenditures* = $4.5 to $5.0 billion 25 * Non-GAAP financial measure. See website for reconciliation.
Slide 26: 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 26
Slide 27: Appendix slides
Appendix slides 27
Slide 28: Major Projects
Major Projects Moving forward Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) ASU/H2 Samsung Giheung, Korea World Scale Q2 FY21 Electronics ASU/Liquid Big River Steel, Arkansas >250 TPD + liquid Q3 FY21 Steel/Merchant Liquid H2 LaPorte, TX ~30 tons per day Q1 FY22 Mercha
Slide 29: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q1 $1.79 $1.86 $2.14 $2.12 $2.52 Q2 $1.71 $1.92 $2.04 $2.08 $2.38 Q3 $1.95 $2.17 $2.01 $2.31 $2.55 - $2.65# Q4 $2.00 $2.27 $2.19 $2.51 $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $8.38 $9.02 $10.20 - $10.40# $11.00 $10.00
Slide 30: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2022 $4.5 - $5.0 billion# 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY22 $MM Q1 $2,331a Q2 $819 Q3 Q4 a YTD $3,150 Capital expenditures are calculated independently for each quarter and may not sum to full year amoun
Slide 31: Thank you
Moving forward Thank you tell me more
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