Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Barclays 2nd Annual Industrial Select Conference (February 2010)
37 slides from Air Products And Chemicals's conference presentation, Feb 17, 2010
Slide 1: Barclays 2nd Annual Industrial Select Conference
Barclays 2nd Annual Industrial Select Conference John E. McGlade, Chairman, President and CEO February 17, 2010
Slide 2: Additional Information
Barclays 2nd Annual industrial Select Conference ADDITIONAL INFORMATION • On February 11, 2010, Air Products Distribution, Inc., a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, Inc
Slide 3: Certain Information Regarding Participants
Barclays 2nd Annual industrial Select Conference CERTAIN INFORMATION REGARDING PARTICIPANTS • [Air Products] and certain of its respective directors and executive officers may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain information
Slide 4: Forward-Looking Statements
Barclays 2nd Annual industrial Select Conference Forward-Looking Statements • All statements included or incorporated by reference in this communication other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our cu
Slide 5: Offer to Acquire Airgas
Offer to Acquire Airgas
Slide 6: Airgas transaction highlights
Barclays 2nd Annual industrial Select Conference Airgas transaction highlights Consideration All-cash offer for all Airgas shares at $60.00 per share Premium Premium of 38% to Airgas’ closing price on 2/04/10 of $43.53 Accretion Expected to be substantially accretive to Air Products cash EPS in year
Slide 7: Compelling strategic and industrial logic
Barclays 2nd Annual industrial Select Conference Compelling strategic and industrial logic Creates one of the world’s leading integrated industrial gas companies • Largest industrial gas company in North America • Diversified across geographies and distribution channels with competitive positions in
Slide 8: Airgas at a glance
Barclays 2nd Annual industrial Select Conference Airgas at a glance Industries Served 2% 2% 2% Revenue (FY2009) $4.3B 3% 4% 7% 25% Total CAGR (over last 5 years) 19% 6% Same Store Sales Growth 7% 9% 27% 13% Industrial mfg. Repair & Maintenance Energy & Infrastructure Construction Medical Food & Beve
Slide 9: A world leading integrated industrial gas company
Barclays 2nd Annual industrial Select Conference A world leading integrated industrial gas company Air Products Airgas Pro-forma Revenues Revenues Air Products Onsite Equipment & Onsite/Pipeline Liquid/Bulk 25% Equipment Services 37% 14% 10% & Services Liquid/Bulk 10% Specialty 17% Materials 14% + =
Slide 10: Synergies
Barclays 2nd Annual industrial Select Conference Synergies Supply Chain • Consolidate filling locations • Consolidate specialty gas plant locations • Move from local delivery to hub and spoke • Combine purchasing requirements • Utilize Shared Services for Packaged Gas operations and Project Manageme
Slide 11: Growth acceleration
Barclays 2nd Annual industrial Select Conference Growth acceleration • New Offerings for US Packaged Gases – Integra ® cylinders – 300 BAR cylinders • Further expand Air Products’ offerings into key industries – Fabrication − Analytical – Construction − Medical – Pharmaceuticals − Food and Beverage
Slide 12: GDP growth
Barclays 2nd Annual industrial Select Conference GDP growth ROW Japan North America Asia (excl. Japan) Europe GDP growth by location 2009 2013 Growth % of World 09-'13 CAGR World 49,115 55,903 6,788 100.0% 3.3% Europe 16,616 17,907 1,291 19.0% 1.9% Asia 12,733 15,472 2,739 40.4% 5.0% Asia ex. Japan
Slide 13: Key measures
Barclays 2nd Annual industrial Select Conference Key measures Accretion/Dilution EBITDA Margin $0.80 26.0% $0.60 25.0% 24.0% $0.40 23.0% $0.20 22.0% $0.00 21.0% FY11 FY12 LTM-12/31/09 FY12 GAAP EPS Cash EPS • Transaction accretive in the • Synergies enable greater cash first year flow generation • S
Slide 14: Path forward . . .
Barclays 2nd Annual industrial Select Conference Path forward . . . Litigation • Commenced litigation in Delaware Tender offer • Offer commenced Feb 11 Air Products • Financing committed committed to Regulatory process completing the • Prepared to make transaction appropriate divestitures Proxy cont
Slide 15: Air Products Financial Performance
Barclays 2nd Annual industrial Select Conference Air Products Financial Performance FY04 thru FY08 H109 H209 Q110 Sales ( CAGR/ % chg vs PY ) 14% (16%) (25%) (1%) Operating Margin * 12.8% 1.8% 14.6% 13.2% 15.5% 15.9% EPS Cont Ops.* 21% (24%) (16%) 20% ROCE (4 quarter trailing)* 9.6% 3.4% 13.0% ROCE
Slide 16: We have Multiple Growth Opportunities
Barclays 2nd Annual industrial Select Conference We have Multiple Growth Opportunities Energy Environment Emerging Markets Hydrogen for refining Oxyfuel Electronics across Asia Oxygen for gasification Carbon capture Equity Affiliate positions LNG heat exchangers Multiple Gas Applicat
Slide 17: Merchant Business – At a glance
Barclays 2nd Annual industrial Select Conference Merchant Business – At a glance • 2009 revenue of $3.6B • Global business plus 5 large JVs • Achieved 18.3% operating margin in FY’09 • Goals: – 20% operating margin by FY’11 – Sustained annual growth: 10% Applications expertise drives growth 17
Slide 18: Merchant Business Applications Driven Growth
Barclays 2nd Annual industrial Select Conference Merchant Business Applications Driven Growth Cleanfire® HRi™ Efficient oxygen burner plant design A winning combination! 18
Slide 19: Merchant Business Winning New Customers with Industrial Gases
Barclays 2nd Annual industrial Select Conference Merchant Business Winning New Customers with Industrial Gases Integra® Cylinders 19
Slide 20: Tonnage Gases – At a glance
Barclays 2nd Annual industrial Select Conference Tonnage Gases – At a glance • 2009 revenue of $3.1B • Leading supplier of refinery hydrogen • Primary end markets – Refining – Chemicals – Steel • Expect 10% H2 and O2 growth long term Exciting growth opportunities in all major regions of the world 20
Slide 21: Tonnage Gases Hydrogen Fueling Growth for the Future
Barclays 2nd Annual industrial Select Conference Tonnage Gases Hydrogen Fueling Growth for the Future Outsourcing • Transport fuels growth 15% Conversion 45% • Heavier, sour crude slate • Clean fuels legislation Clean Fuels • Outsourcing trend 15% Crude 25% 21
Slide 22: Tonnage Gases Leading Global Hydrogen Positions
Barclays 2nd Annual industrial Select Conference Tonnage Gases Leading Global Hydrogen Positions Edmonton, Canada Sarnia, Canada Southern California Texas Rotterdam Louisiana 22
Slide 23: Tonnage Gases Significant New Markets for Oxygen
Barclays 2nd Annual industrial Select Conference Tonnage Gases Significant New Markets for Oxygen • Steel – Asian infrastructure growth – Mill modernization • Gasification – Power – Feedstock independence – Low BTU hydrocarbons • Cleaner coal – Power – CO2 capture 200,000-300,000 tons-per-day new ox
Slide 24: Tonnage Gases Growth from new investments
Barclays 2nd Annual industrial Select Conference Tonnage Gases Growth from new investments Projected 2010 Superior returns: • Marathon Garyville • Ann Joo Steel Malaysia Continuous • XOM Baton Rouge • US Steel Nanticoke, Ont. improvement • Total Port Arthur • Shadeed Steel Oman Operating • XOM Bayto
Slide 25: Electronics and Performance Materials – At a glance
Barclays 2nd Annual industrial Select Conference Electronics and Performance Materials – At a glance • 2009 revenue of $1.6B • Significant opportunities – Semi industry recovery – Thin film PV – Eco-friendly solutions – Emerging markets • Goal of 15% operating margins in FY’11 Focused on margin impr
Slide 26: Electronics Significant Opportunity in Thin-Film PV
Barclays 2nd Annual industrial Select Conference Electronics Significant Opportunity in Thin-Film PV • Flat panel experience = differentiated advantage in thin film technologies • Comprehensive offerings and turnkey solutions through SunSource™ Solutions portfolio 1 GW facility = $100+MM in annual r
Slide 27: Equity Affiliates Important Source of Growth
Barclays 2nd Annual industrial Select Conference Equity Affiliates Important Source of Growth Italy Mexico India Thailand South Africa 27
Slide 28: FY'10 Full Year Outlook Update
Barclays 2nd Annual industrial Select Conference FY’10 Full Year Outlook Update ● FY’10 overall… expecting a FY’09 Adjusted Diluted EPS $4.06 gradual and modest recovery – Merchant loading – Tonnage new projects/loading ● WW manufacturing growth – E&E similar to last year – Globally up 1% to 2% –
Slide 29: The Air Products Opportunity
Barclays 2nd Annual industrial Select Conference The Air Products Opportunity STABILITY GROWTH RESULTS • Long term contracts, • Solid backlog and • Double-digit EPS growth consistent and strong growth predictable cash flow opportunities across all • ROCE 3-5% above cost of geographies capital • Dive
Slide 30: Thank you
Thank you www.airproducts.com
Slide 31: Non GAAP Appendix – Year over Year Deltas
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – Year over Year Deltas ($ Millions, except per share data) GAAP Measure Non GAAP Ajusts. Non GAAP Measure BP FY04 and FY08 - Total Co. FY04 FY08 FY04 (1) FY08 (2) FY04 FY08 CAGR Change Sales 6,163.2 10,414.5 6,163.2 10,414.5 14.0% O
Slide 32: Non GAAP Appendix – Half Year Deltas
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – Half Year Deltas ($ Millions, except per share data) First Half FY09 Second Half FY09 6 months 6 months GAAP Measure Q109 Q209 to date Q309 Q409 to date Sales 2,195.3 1,955.4 4,150.7 1,976.2 2,129.3 4,105.5 Operating Income 114.1 2
Slide 33: Non GAAP Appendix – ROCE FY04 and FY08
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – ROCE FY04 and FY08 $ Millions FY04 FY08 Quarter Ended Q403 Q104 Q204 Q304 Q404 Q407 Q108 Q208 Q308 Q408 Numerator Operating Income Reported 181.7 200.2 231.3 223.7 380.4 348.6 393.7 373.1 Equity Affiliate Income 17.8 19.2 19.8 21.8
Slide 34: Non GAAP Appendix – ROCE Tax Rate FY04 and FY08
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – ROCE Tax Rate FY04 and FY08 Q104 Q204 Q304 Q404 Q108 Q208 Q308 Q408 Reported Income from Cont. Ops. Bef. Tax 169.0 187.6 221.8 217.6 364.9 352.1 400.7 361.1 Noncontrolling Interest (1.9) (4.1) (3.3) (2.5) (6.1) (4.5) (7.6) (4.8) In
Slide 35: Non GAAP Appendix – First/Second Half FY09 and Q1 FY10
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – First/Second Half FY09 and Q1 FY10 $ Millions Quarter Ended Q308 Q408 Q109 Q209 Q309 Q409 Q110 Numerator Operating Income Reported 393.7 373.1 114.1 260.4 143.8 328.0 345.0 Equity Affiliate Income 46.5 30.8 24.5 27.0 28.5 32.2 26.9
Slide 36: Non GAAP Appendix – ROCE Tax Rate FY09 and Q1 FY10
Barclays 2nd Annual industrial Select Conference Non GAAP Appendix – ROCE Tax Rate FY09 and Q1 FY10 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Reported Income from Cont. Ops. Bef. Tax 400.7 361.1 102.1 257.4 144.8 332.3 340.3 Noncontrolling Interest (7.6) (4.8) (5.0) (1.6) (4.8) - (5.0) Income from Cont. Op
Slide 37: Non-GAAP Appendix: FY10 Guidance
Barclays 2nd Annual industrial Select Conference Non-GAAP Appendix: FY10 Guidance ($ Millions, except per share data) FY10 Guidance vs. FY09 Diluted EPS Continuing Ops FY09 GAAP $3.00 FY09 Global Cost Reduction Plan $0.94 FY09 Pension Settlement $0.02 FY09 Customer Bankruptcy and Asset Actions $0.10
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