Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q4 2020 Earnings Presentation
34 slides from Air Products And Chemicals's earnings presentation, Nov 11, 2020
Slide 1: Create Shareholder Value
Moving forward Create Shareholder Value Q4 FY20 Earnings Conference Call November 11, 2020
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: FY20 highlights
Moving forward Making our dream a reality FY20 highlights • Demonstrated strength, character, compassion during COVID: supported Air Products’ workforce, kept global plants running and supplied critical products, won significant new growth projects worldwide, supported local communities • Announced
Slide 4: FY20 highlights
Making our dream a reality Moving forward FY20 highlights • Announced additional large- Made largest-ever U.S. investment scale projects, acquisitions in Gulf Coast Ammonia project (Texas City, Texas) Acquired 5 operating U.S. H2 plants from and supplied H2 to PBF Energy (California, Delaware) Broug
Slide 5: FY20 highlights
Making our dream a reality Moving forward FY20 highlights • Selected to supply world-leading LNG process technology and equipment: Mozambique’s first onshore LNG project; Qatargas’ massive LNG production expansion project in Ras Laffan, State of Qatar; Sonatrach’s GL1Z LNG facility in Arzew, Algeria
Slide 6: Safety results
Moving forward Safety results FY20 vs FY14 FY20 FY14 Employee Lost Time Injury Rate 0.24 0.09 63% better Employee Recordable Injury Rate 0.58 0.40 31% better 6 FY14 includes MT
Slide 7: 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 7
Slide 8: 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 9: 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 10: 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 10
Slide 11: Diversity, Inclusion and Belonging
Moving forward Diversity, Inclusion and Belonging By 2025, Air Products aims to achieve at least 28 percent female representation in the professional and managerial population globally, and at least 20 percent minority representation in that same population in the United States. 11
Slide 12: "Third by '30" Carbon Intensity Goal
Moving forward “Third by ’30” Carbon Intensity Goal 2015 114 (kg CO2e/MM BTU) 76 (kg CO2e/MM BTU) 2030 Goal -33% Deeply integrated in – and outcome More effective communication of of – our business strategy strategy and ambitions with stakeholders 12
Slide 13: Making "Third by '30" a Reality
Moving forward Making “Third by ‘30” a Reality Increased Carbon Carbon-free Low Carbon Operational Utilization of Capture Hydrogen Projects Excellence Renewable Projects Energy Meeting customers on their journey, maximizing resources and sustainability 13
Slide 14: Executing our gasification strategy
Moving forward Executing our gasification strategy Energy, environmental, emerging markets Indonesia 100% APD $2B Debang 2024 JV $0.25B Jiutai 2023 100% APD $0.65B Jazan IG/ 2022 Gasif/Power JV $11.5B Lu’An 2021 JV $1.5B Large ASUs 2018 for China coal gasification 14 Project capital represents 100%,
Slide 15: Air Products Adjusted EPS
Moving forward Air Products Adjusted EPS* $9.00 $8.50 $8.00 $7.50 $7.00 $6.50 +2% +10% $6.00 +18% $5.50 +12% $5.00 +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 15 * Non-GAAP financial measure. See website for reconciliation.
Slide 16: Dividend history
Dividend history Moving forward $5.50 $5.00 Dividend/Share* $4.50 $4.00 $3.50 $3.00 $2.50 2014 2015 2016 2017 2018 2019 2020 • 18c per quarter or >15% dividend increase announced Jan 2020 • ~$1.2B/year of dividend to shareholders in 2020 • 38 consecutive years of dividend increases 16 * Based on ann
Slide 17: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward Up over 1500 basis points 44% 42.7% 41.9% 42% 40.1% 40.3% 40% 40.4% 40.3% 37.7% 38% 36.3% 35.9% 35.7% 36% 35.2% 34.8% 34.9% 34.1% 34.3% 35.8% 33.9% 34% 33.2% 34.8% 32.9% 33.2% 32% 31.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% 17 * Non-GAAP financial measu
Slide 18: Fiscal Year Results
Moving forward Fiscal Year Results ($ million) FY19 FY20 Change Sales $8,919 $8,856 (1%) - Volume 2% - Price 3% - Energy/Raw Mat’l pass-thru (4%) - Currency (1%) - Other (India contract modification) (1%) Adjusted EBITDA* $3,468 $3,620 4% - Adjusted EBITDA Margin* 38.9% 40.9% 200bp Adjusted Operatin
Slide 19: Full Year Adjusted EPS
Full Year Adjusted EPS* Moving forward Adjusted EPS* Up vs. PY FY19 FY20 Change GAAP cont ops EPS $7.94 $8.55 non-GAAP items 0.27 (0.18) Adjusted EPS* $8.21 $8.38 $0.17 Volume (0.19) Price (net of variable costs) 0.77 Other Cost (0.38) $0.20 Currency/FX ($0.07) Equity Affiliate Inc / Non-controlling
Slide 20: Q4 Results
Q4 Results Moving forward Fav/(Unfav) vs. ($ million) Q4FY20 Q4FY19 Q3FY20 Sales $2,320 2% 12% - Volume -% 8% - Price 2% 1% - Energy cost pass-through (1%) 1% - Currency 1% 2% Adjusted EBITDA* $938 (2%) 6% - Adjusted EBITDA Margin* 40.4% (150bp) (230bp) Adjusted Operating Income* $560 (7%) 4% - Adju
Slide 21: Q4 Adjusted EPS
Q4 Adjusted EPS* Moving forward Q4FY19 Q4FY20 Change GAAP cont ops EPS $2.27 $2.19 non-GAAP items 0.00 0.00 Adjusted EPS* $2.27 $2.19 ($0.08) Volume (0.22) Price (net of variable costs) 0.16 Other Cost (0.13) ($0.19) Currency/FX $0.03 Equity Affiliate Inc / Non-controlling Int 0.06 Tax Rate 0.09 Int
Slide 22: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) FY19 FY20 Change Adjusted EBITDA* $3,468 $3,620 $152 Interest, net* (65) (79) (14) Cash Tax (324) (380) (56) Maintenance CapEx* (414) (563) (149) Distributable Cash Flow* $2,665 $2,598 ($67) $12.03/Share* $11.69/Share* Dividends (994) (1,104) (110) Investab
Slide 23: Capital Deployment Scorecard
Capital Deployment Scorecard Moving forward Substantial investment capacity remaining Available Now (9/30/20) (in $Billion) Total Debt Capacity $ 10.9 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 1.5 Debt ($7.9B) minus cash# ($6.4B) Additional Available Now $ 9.3 Estimated Available In Future $ 3.0
Slide 24: Industrial Gases - Asia
Moving forward Industrial Gases - Asia Fav/(Unfav) vs. Q4FY20 Q4FY19 Q3FY20 Sales $714 (2%) 9% - Volume (5%) 7% - Price 2% -% - Energy cost pass-through (1%) -% - Currency 2% 2% Adjusted EBITDA* $330 (7%) 1% - Adjusted EBITDA Margin* 46.3% (200bp) (380bp) Operating Income $211 (9%) (5%) - Operating
Slide 25: Industrial Gases - Americas
Moving forward Industrial Gases - Americas Fav/(Unfav) vs. Q4FY20 Q4FY19 Q3FY20 Sales $912 (3%) 7% - Volume (3%) 4% - Price 2% 1% - Energy cost pass-through (1%) 2% - Currency (1%) -% Adjusted EBITDA* $411 -% -% - Adjusted EBITDA Margin* 45.0% 110bp (340bp) Operating Income $239 (8%) (4%) - Operatin
Slide 26: Industrial Gases - EMEA
Moving forward Industrial Gases - EMEA Fav/(Unfav) vs. Q4FY20 Q4FY19 Q3FY20 Sales $505 3% 18% - Volume -% 11% - Price 2% -% - Energy cost pass-through (3%) 1% - Currency 4% 6% Adjusted EBITDA* $200 4% 18% - Adjusted EBITDA Margin* 39.6% 10bp 10bp Operating Income $123 2% 17% - Operating Margin 24.4%
Slide 27: Industrial Gases - Global
Moving forward Industrial Gases - Global Fav/(Unfav) vs. Q4FY20 Q4FY19 Sales $115 $34 Adjusted EBITDA* ($6) ($15) Operating Income ($10) ($17) • Sales up on SOE project activity • Profit down on business mix and higher project development investments 27 * Non-GAAP financial measure. See website for
Slide 28: Corporate
Moving forward Corporate Fav/(Unfav) vs. Q4FY20 Q4FY19 Sales $74 $30 Adjusted EBITDA* $3 $14 Operating Income ($2) $14 • LNG project activity drives business improvement • Major LNG projects wins for Qatargas and Sonatrach 28 * Non-GAAP financial measure. See website for reconciliation.
Slide 29: 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 29
Slide 30: Appendix slides
Appendix slides
Slide 31: Major projects
Major projects * Multiple Phases Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) H2/CO Geismar, Louisiana 50MMH2+6.5MMCO Q2 FY20 Chem/Pipeline Hydrogen PBF - California & Delaware 300MMSCFD Q3 FY20 Refinery PROJECT COMMITMENTS ASU/H2 Samsung Giheung, Korea World Scale Q1
Slide 32: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1 $1.79 $1.86 $2.14 Q2 $1.71 $1.92 $2.04 Q3 $1.95 $2.17 $2.01 Q4 $2.00 $2.27 $2.19 $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $8.38 $9.00 $8.00 $7.00 +2% $6.00 +10% $5.00 +18% $4.00 +12% $3.00 +16% +10% $2.00 $1.00 $- FY14 FY15 F
Slide 33: Capital Expenditure
Capital Expenditure* Moving forward FY $MM 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 Quarter 2020 $MM Q1 $455 Q2 $498 Q3 $1,116 Q4 $647 * Non-GAAP financial measure. See website for reconciliation. 33 Capital expenditure is calculated independently for each quarter and ma
Slide 34: Thank you
Moving forward Thank you tell me more
Air Products and Chemicals — Q4 2020 Earnings Presentation on 6ix