Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q3 2020 Earnings Presentation
29 slides from Air Products And Chemicals's earnings presentation, Jul 23, 2020
Slide 1: Create Shareholder Value: Q3 FY20 Earnings Conference Call
Moving forward Create Shareholder Value Q3 FY20 Earnings Conference Call July 23 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: Resilient team and business model, successful execution of growth strategy
Moving forward Resilient team and business model, successful execution of growth strategy • Demonstrating leadership amid COVID-19 - Employees: prioritizing health and welfare, providing financial security - Communities: safely maintaining plant operations, business continuity - Customers: reliably
Slide 4: Safety results
Moving forward Safety results Q320 FY20 vs FY14 YTD FY14 Employee Lost Time Injury Rate 0.24 0.08 68% better Employee Recordable Injury Rate 0.58 0.39 32% better 4 FY14 includes MT
Slide 5: 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 5
Slide 6: 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 7: 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 8: Carbon-free hydrogen
Carbon-free hydrogen Moving forward Produced and delivered with proven, world-class technology Hydrogen Production at NEOM Hydrogen Refueling Station Electrolyzer Hydrogen Dissociation H2 Compression Power H2 Nitrogen Ammonia Wind/Solar Global Distribution Ammonia Carbon- Ship/Truck Production free
Slide 9: Indonesia Project – Bengalon
Moving forward Indonesia Project – Bengalon • Customers: PT Bakrie Capital Indonesia (Bakrie Group) and PT Ithaca Resources (AP Investment) – large Indonesia companies • Location: Bengalon, East Kalimantan, Indonesia • Scope: - ASU, gasification, syngas clean-up, utilities, methanol - Produce ~2 mil
Slide 10: 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 2020 JV $1.5B Large ASUs 2018 for China coal gasification GE Gasification Technology Shell Ga
Slide 11: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward Up over 1700 basis points 44% 42.7% 41.9% 42% 40.1% 40.3% 40% 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% 11 * Non-GAAP financial measure. Se
Slide 12: Financial Strength
Financial Strength Moving forward Successful ~$5B Debt Offering in April • $3.8B & €1.0B fixed rates • Investors’ confidence in Air Products’ financial stability • Very stable cash flows driven by industry-leading onsite business • Committed to manage debt balance to maintain current targeted A/A2 r
Slide 13: Dividend history
Dividend history Moving forward $5.50 $5.36 $5.00 $4.50 $4.00 Dividend/Share* $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 • 18c per quarter or >15% dividend increase announced Jan 2020 • ~$1.
Slide 14: Q3 Results
Q3 Results Moving forward Fav/(Unfav) vs. ($ million) Q3FY20 Q3FY19 Q2FY20 Sales $2,065 (7%) (7%) - Volume (3%) (5%) - Price 2% 1% - Energy cost pass-through (4%) (2%) - Currency (2%) (1%) Adjusted EBITDA* $881 (1%) (1%) - Adjusted EBITDA Margin* 42.7% 260bp 240bp Adjusted Operating Income* $539 (5%
Slide 15: Q3 Adjusted EPS
Q3 Adjusted EPS* Moving forward Q3FY19 Q3FY20 Change GAAP cont ops EPS $2.20 $2.01 non-GAAP items (0.03) 0.00 Adjusted EPS* $2.17 $2.01 ($0.16) Volume (0.25) Price (net of variable costs) 0.16 Other Cost 0.04 ($0.05) Currency/FX ($0.05) Equity Affiliate Income (0.02) Tax Rate (0.02) Other (Interest
Slide 16: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) Q3FY20 LTM Adjusted EBITDA* $3,639 Interest, net* (59) Cash Tax (402) Maintenance CapEx* (510) Distributable Cash Flow* $2,668 $12/Share* Dividends (1,063) Investable Cash Flow* $1,605 • $12/share of Distributable Cash Flow* • Paid about 40% of Distributabl
Slide 17: 2018 announced goal: commit $15B in new projects
Moving forward 2018 announced goal: “Commit $15B in new projects by end of 2022” Current status (as of 6/30/20) Spent $ 4.9B Additional Committed* $11.0B Total spent & committed $15.9B >100% of Goal 17 * Remaining spending on total commitments of ~$12.5 billion
Slide 18: Capital Deployment Scorecard
Capital Deployment Scorecard Moving forward FY18 – FY22, as of 6/30/20, $Billion Available Now (6/30/20) Total Debt Capacity $ 11.0 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 1.8 Debt ($8.2B) minus cash# ($6.4B) Additional Available Now $ 9.2 Estimated Available In Future $ 3.6 LTM ICF* x 2.25 yea
Slide 19: Industrial Gases - Asia
Moving forward Industrial Gases - Asia Fav/(Unfav) vs. Q3FY20 Q3FY19 Q2FY20 Sales $652 (4%) (1%) - Volume (3%) (1%) - Price 2% 1% - Energy cost pass-through -% -% - Currency (3%) (1%) Adjusted EBITDA* $327 (2%) -% - Adjusted EBITDA Margin* 50.1% 90bp 40bp Operating Income $222 (4%) 6% - Operating Ma
Slide 20: Industrial Gases - Americas
Moving forward Industrial Gases - Americas Fav/(Unfav) vs. Q3FY20 Q3FY19 Q2FY20 Sales $850 (11%) (9%) - Volume (5%) (7%) - Price 2% -% - Energy cost pass-through (6%) (1%) - Currency (2%) (1%) Adjusted EBITDA* $411 -% (3%) - Adjusted EBITDA Margin* 48.4% 550bp 280bp Operating Income $248 (5%) (7%) -
Slide 21: Industrial Gases - EMEA
Moving forward Industrial Gases - EMEA Fav/(Unfav) vs. Q3FY20 Q3FY19 Q2FY20 Sales $430 (13%) (13%) - Volume (7%) (8%) - Price 3% -% - Energy cost pass-through (6%) (4%) - Currency (3%) (1%) Adjusted EBITDA* $170 (11%) (9%) - Adjusted EBITDA Margin* 39.5% 110bp 180bp Operating Income $105 (15%) (16%)
Slide 22: Industrial Gases - Global
Moving forward Industrial Gases - Global Fav/(Unfav) vs. Q3FY20 Q3FY19 Sales $78 $20 Adjusted EBITDA* ($9) ($3) Operating Income ($13) ($4) • Sales up on SOE project activity • Profit down on higher project development costs 22 * Non-GAAP financial measure. See website for reconciliation.
Slide 23: Corporate
Moving forward Corporate Fav/(Unfav) vs. Q3FY20 Q3FY19 Sales $56 $19 Adjusted EBITDA* ($17) $19 Operating Income ($23) $19 • LNG project activity drives business improvement 23 * Non-GAAP financial measure. See website for reconciliation.
Slide 24: 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 24
Slide 25: Appendix slides
Appendix slides
Slide 26: Major projects
Major projects * Multiple Phases Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) Liquid ASU Glenmont, NY 1100 TPD LXNLAR Q3 FY19 Merchant ASU/H2/Air Samsung Xi’an, China World Scale Q3 FY19* Electronics H2/CO Geismar, Louisiana 50MMH2+6.5MMCO Q2 FY20 Chem/Pipeline Hydrog
Slide 27: 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 $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 +10% +18% +12% +4% # $3.00 +16% +10% $2.00 $1.00 $- FY14 FY15 FY16
Slide 28: Capital Expenditure
Capital Expenditure* Moving forward FY $MM 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 28 * Non-GAAP financial measure. See website for reconciliation.
Slide 29: Thank you
Moving forward Thank you tell me more
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