Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Goldman Sachs Basic Materials Conference 2010
28 slides from Air Products And Chemicals's conference presentation, Jun 3, 2010
Slide 1: Paul Huck, SVP and CFO - Goldman Sachs Basic Materials Conference
Paul Huck SVP and CFO Goldman Sachs Basic Materials Conference June 3, 2010
Slide 2: Forward Looking Statement
Goldman Sachs Basic Materials Conference 2010 Forward Looking Statement This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance and comments regarding the Company’s proposed acquisi
Slide 3: Additional Information
Goldman Sachs Basic Materials Conference 2010 ADDITIONAL INFORMATION On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), 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 Ai
Slide 4: Financial Performance
Goldman Sachs Basic Materials Conference 2010 Financial Performance* FY04 thru FY08 H109 H209 H110 Sales 14% (16%) (25%) 7% ( CAGR| % chg vs PY ) Operating Margin 12.8% +1.8% 14.6% 13.2% 15.5% 16.0% Adj’d Cont Ops EPS 21% (24%) (16%) 28% ( CAGR| % chg vs PY ) ROCE (4 quarter trailing) 9.6% +3.4% 13.
Slide 5: We have Multiple Growth Opportunities
Goldman Sachs Basic Materials Conference 2010 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 Application
Slide 6: Merchant Gases: Strong growth in Asia
Goldman Sachs Basic Materials Conference 2010 Merchant Gases Strong growth in Asia China Liquid Share 2009 - Majors • Largest Liquid/Bulk Share in Competitor 4 Air Products 15% China among global majors Competitor 3 31% • Leading Merchant Gases 16% Competitor 1 supplier in India 20% • Leading Mercha
Slide 7: Merchant Gases: Applications Driven Growth
Goldman Sachs Basic Materials Conference 2010 Merchant Gases Applications Driven Growth Cleanfire® HRi™ Efficient oxygen burner plant design A winning combination! 7
Slide 8: Tonnage Gases: Hydrogen Still Fueling Future Growth
Goldman Sachs Basic Materials Conference 2010 Tonnage Gases Hydrogen Still Fueling Future Growth Outsourcing 15% Clean Fuels 15% Conversion 45% Refinery Conversion Crude 25% Low-Conversion High-Conversion Refinery Refinery Transportation Fuel 46% Transportation Fuel 82% Other 20% Residual Fuel 34% O
Slide 9: Tonnage Gases: Leading Global Hydrogen Positions
Goldman Sachs Basic Materials Conference 2010 Tonnage Gases Leading Global Hydrogen Positions Edmonton, Canada Sarnia, Canada Southern California Texas Rotterdam Louisiana 9
Slide 10: Tonnage Gases: Significant New Markets for Oxygen
Goldman Sachs Basic Materials Conference 2010 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 oxygen capacity
Slide 11: Tonnage Gases: Asian growth accelerating
Goldman Sachs Basic Materials Conference 2010 Tonnage Gases Asian growth accelerating Superior North America & Europe returns: • Marathon Garyville • Marathon Detroit Continuous • XOM Baton Rouge • Monsanto Louisiana improvement • Total Port Arthur • US Steel Nanticoke, Ont. Operating • XOM Baytown
Slide 12: Electronics: Strong Recovery Continues
Goldman Sachs Basic Materials Conference 2010 Electronics Strong Recovery Continues • Solid growth in existing and new markets 200% PV – IC silicon (MSI) = 13% LED – TFT-LCD = 20% TFT-LCD Silicon (MSI) – PV = 30% 100% – LED = 14% (‘09 to ‘13 CAGR) 0% 2009 2010 2011 2012 2013 • Majority market share
Slide 13: Equity Affiliates: Important Source of Growth
Goldman Sachs Basic Materials Conference 2010 Equity Affiliates Important Source of Growth Italy Mexico India Thailand South Africa 13
Slide 14: Outlook
Goldman Sachs Basic Materials Conference 2010 Outlook Q3 FY’10 EPS $1.25-$1.29 Improving economy, seasonality New plants on-stream Higher Electronics restructuring costs Higher Energy development spending/outages FY’10 EPS $4.90-$5.00 WW manufacturing growth up ~2% CapEx forecast unchang
Slide 15: Offer to Acquire Airgas
Offerto Acquire Airgas AIR _/. PRODUCTS £2:
Slide 16: Airgas transaction highlights
Goldman Sachs Basic Materials Conference 2010 Airgas transaction highlights Consideration All-cash offer for all Airgas shares at $60.00 per share Premium Premium of 38% to ARG unaffected price on 2/04/10 of $43.53 Accretion Expected to be substantially accretive to Air Products cash EPS in year one
Slide 17: Compelling strategic and industrial logic
Goldman Sachs Basic Materials Conference 2010 Compelling strategic and industrial logic Creates one of the world’s leading integrated industrial gas companies • Largest industrial gas company in North America • Diversified across geographies and distribution channels with competitive positions in al
Slide 18: Path forward
Goldman Sachs Basic Materials Conference 2010 Path forward . . . Litigation • Commenced litigation in Delaware Tender offer • Offer commenced Feb 11 Air Products • Financing committed committed to Regulatory process completing • Prepared to make transaction appropriate divestitures Shareholder meeti
Slide 19: Air Products' proposals
Goldman Sachs Basic Materials Conference 2010 Air Products’ proposals 1. Election of three independent director nominees 2. Amend by-laws to implement director eligibility requirements • Would make any Airgas board members (except CEO) not elected at annual meeting ineligible to serve on Airgas Boar
Slide 20: The Air Products opportunity
Goldman Sachs Basic Materials Conference 2010 The Air Products opportunity STABILITY GROWTH RESULTS • Long term contracts, • Solid backlog and • Double-digit EPS growth consistent and strong growth predictable cash flow opportunities across all • ROCE 3-5% above cost of geographies capital • Diversi
Slide 21: Thank you
Thank you www.airproducts.com
Slide 22: Non GAAP Appendix: Year over Year Deltas
Goldman Sachs Basic Materials Conference 2010 Non GAAP Appendix: Year over Year Deltas ($ 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% Operati
Slide 23: Non GAAP Appendix: Half Year Deltas
Goldman Sachs Basic Materials Conference 2010 Non GAAP Appendix: Half Year Deltas ($ Millions, except per share data) First Half FY09 Second Half FY09 First Half FY10 6 months 6 months 6 months GAAP Measure Q109 Q209 to date Q309 Q409 to date Q110 Q210 to date Sales 2,195.3 1,955.4 4,150.7 1,976.2 2
Slide 24: Appendix: ROCE
Goldman Sachs Basic Materials Conference 2010 Appendix: ROCE $ Millions Quarter Ended Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Numerator Operating Income Reported 348.6 393.7 373.1 114.1 260.4 143.8 328.0 345.0 340.6 Equity Affiliate Income 42.4 46.5 30.8 24.5 27.0 28.5 32.2 26.9 32.2 Earni
Slide 25: Appendix: ROCE Tax Rate
Goldman Sachs Basic Materials Conference 2010 Appendix: ROCE Tax Rate Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Reported Income from Cont. Ops. Bef. Tax 352.1 400.7 361.1 102.1 257.4 144.8 332.3 340.3 343.3 Noncontrolling Interest (4.5) (7.6) (4.8) (5.0) (1.6) (4.8) - (5.0) (6.4) Income from Cont
Slide 26: Non GAAP Appendix: ROCE FY04 and FY08
Goldman Sachs Basic Materials Conference 2010 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 25.
Slide 27: Non GAAP Appendix: ROCE Tax Rate FY04 and FY08
Goldman Sachs Basic Materials Conference 2010 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) Income
Slide 28: Non-GAAP Appendix: FY10 Guidance
Goldman Sachs Basic Materials Conference 2010 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 FY
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