Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q2 2024 Earnings Presentation
23 slides from Air Products And Chemicals's earnings presentation, Apr 30, 2024
Slide 1: Creating Shareholder Value
Moving forward Creating Shareholder Value Second Quarter 2024 Earnings Results Teleconference April 30, 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 Q2 FY24 FY14 % Change YTD Employee Lost Time Injury Rate 0.24 0.05 79% better Employee Recordable Injury Rate 0.58 0.22 62% 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: Second Quarter Update
Moving forward Second Quarter Update • Q2 adjusted EPS* of $2.85 - Exceeded upper end of previous guidance range - Up 4% vs. prior year on strong results in Americas & Europe • Focused on two-pillar growth strategy - Effectively managing our base business - Executing energy transition projects • Sta
Slide 6: Outlook
Moving forward Outlook* Q3 FY24 FY24 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $3.00 to $3.05 +1% to +2% $12.20 to $12.50 +6% to +9% Expect FY24 capital expenditures* of $5 billion - $5.5 billion *Non-GAAP financial measure. See website for reconciliation. 6
Slide 7: 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 FY19
Slide 8: 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 • ~$1.6 bill
Slide 9: Adjusted EBITDA Margin
Moving forward Adjusted EBITDA Margin* 44% 42.7% 41.9% 42% 40.9% 40.1% 40.4% 39.8% 39.5% 40% 40.3% 40.3% 39.2% 37.7% 39.2% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36.0% 36% 34.8% 34.9% 36.6% 35.8% 35.7% 34.6% 33.9% 34.1% 34.3% 33.9% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 28.7% 2
Slide 10: Q2 Results
Q2 Results Moving forward Fav/(Unfav) vs. ($ million) Q2FY24 Q2FY23 Q1FY24 Sales $2,930 (8%) (2%) - Volume (2%) (2%) - Price 1% 1% - Energy cost pass-through (6%) (1%) - Currency (1%) -% Adjusted EBITDA* $1,198 4% 2% - Adjusted EBITDA Margin* 40.9% 490bp 170bp Adjusted Operating Income* $694 8% 4% -
Slide 11: Q2 Adjusted EPS
Q2 Adjusted EPS* Moving forward Q2FY23 Q2FY24 Change GAAP EPS from cont. ops $1.97 $2.57 Non-GAAP items 0.77 0.28 Adjusted EPS* $2.74 $2.85 $0.11 Volume (0.07) Price, net of variable costs 0.16 Other cost 0.12 $0.21 Currency ($0.03) Equity affiliates’ income (0.08) Interest expense (0.07) Noncontrol
Slide 12: Americas
Moving forward Americas Fav/(Unfav) vs. Q2FY24 Q2FY23 Q1FY24 Sales $1,246 (9%) (1%) - Volume 1% -% - Price 3% 1% - Energy cost pass-through (12%) (1%) - Currency (1%) (1%) Adjusted EBITDA* $590 15% 5% - Adjusted EBITDA Margin* 47.4% 1,000bp 260bp Operating Income $372 15% 5% - Operating Margin 29.9%
Slide 13: Asia
Moving forward Asia Fav/(Unfav) vs. Q2FY24 Q2FY23 Q1FY24 Sales $780 (4%) (2%) - Volume (1%) (2%) - Price -% -% - Energy cost pass-through 1% -% - Currency (4%) -% Adjusted EBITDA* $328 (6%) -% - Adjusted EBITDA Margin* 42.1% (90bp) 90bp Operating Income $204 (13%) (4%) - Operating Margin 26.1% (250b
Slide 14: Europe
Moving forward Europe Fav/(Unfav) vs. Q2FY24 Q2FY23 Q1FY24 Sales $668 (11%) (9%) - Volume (6%) (8%) - Price (1%) -% - Energy cost pass-through (6%) (2%) - Currency 2% 1% Adjusted EBITDA* $264 5% (1%) - Adjusted EBITDA Margin* 39.5% 620bp 310bp Operating Income $201 16% 2% - Operating Margin 30.1% 71
Slide 15: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q2FY24 Q2FY23 Sales $36 ($9) Operating Income $6 $4 Equity Affiliates’ Income $74 ($25) Adjusted EBITDA* $86 ($21) • Sales decreased due to lower volume • Operating income improved due to lower costs • Equity affiliates’ income lower due to higher i
Slide 16: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q2FY24 Q2FY23 Sales $201 ($14) Adjusted EBITDA* ($70) $1 Operating Income ($88) ($2) • Lower costs and improved LNG activities offset non-LNG sale of equipment headwinds 16 * Non-GAAP financial measure. See website for reconciliation.
Slide 17: Our Competitive Advantage
Moving forward Our Competitive Advantage The only sustainable element of long-term competitive advantage is the degree of commitment and motivation of the people in the enterprise 17
Slide 18: Appendix slides
Appendix slides 18
Slide 19: Major Project Commitments
Major Project Commitments Moving forward Expect strong pipeline of growth projects to extend leadership position in low- and zero-carbon hydrogen Plant Customer/Location Supply Mode/Off-take Key Investment Recently Onstream Attributes ASU/Gasifier/Power Aramco/Jazan, Saudi Arabia On-site/Long Term •
Slide 20: Cash Flow Focus
Cash Flow Focus Moving forward Supports dividend and capital deployment ($ million) Q2FY24 LTM Adjusted EBITDA* $4,840 Interest, net* (257) Cash Tax (641) Maintenance Capex* (736) Distributable Cash Flow* $3,206 $14.39/Share* Dividends (1,555) Investable Cash Flow* $1,651 • >$14/share of distributab
Slide 21: 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 Q2 FY24 Future Investable Cash Flow*1 16.5 Cumulative Investable Cash
Slide 22: 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 Q4 YTD $2,671 Capital expenditures are calculated independently for each quarter and may not sum to full year amount due to rounding. * Non-
Slide 23: Thank you
Moving forward Thank you tell me more
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