Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q3 2023 Earnings Presentation
24 slides from Air Products And Chemicals's earnings presentation, Aug 3, 2023
Slide 1: Creating Shareholder Value – Q3 FY23 Earnings Conference Call
Moving forward Creating Shareholder Value Q3 FY23 Earnings Conference Call August 3, 2023
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 Q3FY23 vs FY14 Q3FY23 FY14 Employee Lost Time Injury Rate 0.24 0.11 54% better Employee Recordable Injury Rate 0.58 0.31 47% 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: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward Q3 FY23 Adjusted EPS* of $2.98 up 16% vs. last year +11% to +12% $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 +17% $7.50 +8% $7.00 +2% $6.50 $6.00 +10% +18% $5.50 +12% $5.00 +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 (A) FY23(A
Slide 6: Dividend History
Dividend History Moving forward 40+ consecutive years of dividend increases $7.00 $6.50 $6.00 $5.50 Dividend/Share* $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 • Increased dividend to $1.75 per share, up 8% ($0.13 per share) compared to prior year; ann
Slide 7: Adjusted EBITDA Margin
Moving forward Adjusted EBITDA Margin* 44% 42.7% 41.9% 42% 40.1% 40.4% 39.8% 40% 40.3% 40.3% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36.0% 36% 34.8% 34.9% 36.6% 35.8% 35.7% 34.6% 33.9% 34.1% 34.3% 33.9% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26%
Slide 8: Two-Pillar Growth Strategy
Moving forward Two-Pillar Growth Strategy Core Industrial Blue and Green Gases Business Hydrogen & Sustainability 8
Slide 9: Q3 Results
Q3 Results Moving forward Fav/(Unfav) vs. ($ million) Q3FY23 Q3FY22 Q2FY23 Sales $3,034 (5%) (5%) - Volume 3% 1% - Price 4% -% - Energy cost pass-through (11%) (6%) - Currency (1%) -% Adjusted EBITDA* $1,208 12% 5% - Adjusted EBITDA Margin* 39.8% 590bp 380bp Adjusted Operating Income* $703 12% 9% -
Slide 10: Q3 Adjusted EPS
Q3 Adjusted EPS* Moving forward Up 16% on strong operating performance Q3FY22 Q3FY23 Change GAAP EPS from cont. ops $2.62 $2.67 Non-GAAP items (0.03) 0.30 Adjusted EPS* $2.58 $2.98 $0.40 Volume 0.09 Price, net of variable costs 0.52 Other cost (0.27) $0.34 Currency ($0.06) Equity affiliates’ income
Slide 11: Cash Flow
Moving forward Cash Flow Supports dividend and capital deployment Q3FY23 LTM ($ millions) Adjusted EBITDA* $4,587 Interest, net* (168) Cash Tax (575) Maintenance Capex (627) Distributable Cash Flow* $3,217 $14.45/Share* Dividends (1,467) Investable Cash Flow* $1,750 • >$14/share of distributable cas
Slide 12: FY23-32 Capital Deployment
Moving forward FY23-32 Capital Deployment Substantial investment capacity & significant backlog to support growth 10-Year Capital Deployment Outlook Assumes 3.0x LTM Adjusted EBITDA* less net debt* as of Current Additional Debt Capacity $6.2 Q3 FY23 Future Investable Cash Flow1 17.5 Cumulative Inves
Slide 13: Overview of Major Project Commitments
Moving forward Overview of Major Project Commitments* Air Products has a strong pipeline of growth projects which extends our leadership position in low-carbon hydrogen ~Project ~Air Products Supply Key Investment Plant Customer/Location Cost ($B) Investment ($B) Mode/Offtake Attributes Recently Ons
Slide 14: Jiutai Syngas Project – Greenfield and Today
Moving forward Jiutai Syngas Project – Greenfield Jiutai Gasification • World-scale coal-to-syngas plant in Hohhot, China is operational • Jiutai supplies coal feedstock and takes all plant output • Achieved nearly 13 million safe working hours without a lost-time injury Jiutai Syngas Project – Toda
Slide 15: Americas
Moving forward Americas Fav/(Unfav) vs. Q3FY23 Q3FY22 Q2FY23 Sales $1,261 (11%) (8%) - Volume 6% 4% - Price 4% -% - Energy cost pass-through (21%) (12%) - Currency -% -% Adjusted EBITDA* $568 18% 10% - Adjusted EBITDA Margin* 45.0% 1,110bp 760bp Operating Income $375 25% 16% - Operating Margin 29.7%
Slide 16: Asia
Moving forward Asia Fav/(Unfav) vs. Q3FY23 Q3FY22 Q2FY23 Sales $823 10% 1% - Volume 8% 2% - Price 4% 1% - Energy cost pass-through 3% -% - Currency (5%) (2%) Adjusted EBITDA* $357 10% 2% - Adjusted EBITDA Margin* 43.3% 20bp 30bp Operating Income $241 14% 3% - Operating Margin 29.3% 130bp 70bp Versus
Slide 17: Europe
Moving forward Europe Fav/(Unfav) vs. Q3FY23 Q3FY22 Q2FY23 Sales $707 (4%) (6%) - Volume 1% (2%) - Price 6% (1%) - Energy cost pass-through (13%) (5%) - Currency 2% 2% Adjusted EBITDA* $254 23% 1% - Adjusted EBITDA Margin* 35.9% 790bp 260bp Operating Income $176 28% 2% - Operating Margin 24.9% 630bp
Slide 18: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q3FY23 Q3FY22 Sales $40 $4 Operating Income $6 ($1) Equity Affiliates’ Income $96 $28 Adjusted EBITDA* $108 $27 • Sales increased due to stronger merchant volume & price • Higher costs negatively impacted operating income • Jazan Project Phase II, c
Slide 19: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q3FY23 Q3FY22 Sales $204 ($43) Adjusted EBITDA* ($78) ($66) Operating Income ($94) ($68) • Sales and profit lower on reduced sale of equipment activity • Additional resources to support growth strategy • New LNG sale of equipment project wins 19 * N
Slide 20: Outlook
Moving forward Outlook* Q4 FY23 FY23 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $3.04 to $3.14 +7% to +10% $11.40 to $11.50 +11% to +12% FY23 Capital Expenditures* $5.0 - $5.5 billion *Non-GAAP financial measure. Fiscal year 2022 comparisons have been updated to reflect adjustment for n
Slide 21: 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 21
Slide 22: Appendix slides
Appendix slides 22
Slide 23: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2023 $5.0 - $5.5 billion# 2022 $4,650 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 FY23 $MM Q1 $725 Q2 $1,693 Q3 $1,667 Q4 YTD $4,085 Capital expenditures are calculated independently for each quarter and may not sum to full year amount due to rounding.
Slide 24: Thank you
Moving forward Thank you tell me more
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