Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q3 2021 Earnings Presentation
34 slides from Air Products And Chemicals's earnings presentation, Aug 9, 2021
Slide 1: Create Shareholder Value: Q3 FY21 Earnings Conference Call
Moving forward Create Shareholder Value Q3 FY21 Earnings Conference Call August 9, 2021
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: CFO transition
Moving forward CFO transition Scott Crocco Melissa Schaeffer 3
Slide 4: Safety results
Moving forward Safety results Q3FY21 Q3FY21 vs FY14 YTD FY14 Employee Lost Time Injury Rate 0.24 0.07 71% better Employee Recordable Injury Rate 0.58 0.41 29% better FY14 includes former Materials Technologies businesses divested in FY2017 4
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: Our Higher Purpose
Moving forward Our Higher Purpose Bringing people together to collaborate and innovate solutions to the world’s most significant energy and environmental sustainability challenges 8
Slide 9: Sustainability highlights
Sustainability highlights Moving forward Sustainability is our growth strategy New Goal 72 million 57% annually increase CO2 emissions avoided metric tons of CO2e avoided of revenue from through products due to our products sustainable offerings New Goal 24% 3 times Reduce CO2 emissions intensity by
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 2021 JV $1.5B Large ASUs 2018 for China coal gasification • Lu'An: Facility is operating • Ja
Slide 11: Alberta, Canada world-scale net-zero hydrogen energy complex
Moving forward Alberta, Canada world-scale net-zero hydrogen energy complex 11
Slide 12: Alberta world-scale net-zero hydrogen energy complex
Moving forward Alberta world-scale net-zero hydrogen energy complex • Project: Net-Zero energy complex including natural gas autothermal reformer (ATR), >95% carbon capture and sequestration, ASU, hydrogen power plant, 30 MTPD liquid hydrogen plant, and connection to Air Products’ existing Alberta H
Slide 13: Hydrogen fuel cell trucks
Moving forward Hydrogen fuel cell trucks Co-development project with Cummins • Air Products currently uses >2,000 heavy-duty trucks to deliver our products • Plan to convert the fleet to Hydrogen Fuel Cell power by 2030 • Air Products will work with Cummins to develop the Hydrogen Fuel Cell Electric
Slide 14: Capital deployment I: 2018 – 2022
Moving forward Capital deployment I: 2018 – 2022 Exceeded initial target two years early while maintaining A/A2 rating $18.0 $16.0 $14.0 Spent + Committed ($B) ~$15B by $12.0 end FY22 $10.0 $8.0 $6.0 $4.0 $2.0 $- Q4FY18 Q4FY19 Q4FY20 Q3FY21 Q4FY22 Actual 14
Slide 15: Capital deployment II: 2018 – 2027
Moving forward Capital deployment II: 2018 – 2027 >$30B by FY27 while maintaining A/A2 rating $35.0 $30.0 Spent + Committed ($B) $25.0 >$30B by end FY27 $20.0 $15.0 $10.0 $5.0 $- Q4FY18 Q4FY19 Q4FY20 Q3FY21 Q4FY22 Q4FY23 Q4FY24 Q4FY25 Q4FY26 Q4FY27 Actual 15
Slide 16: Air Products adjusted EPS
Moving forward Air Products adjusted EPS* $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 +7% $6.50 +2% $6.00 +10% +18% $5.50 +12% $5.00 +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Guidance * Non-GAAP financial measure. See website for reconciliation. 16 CAGR is calculated using midpoint of FY
Slide 17: Dividend history
Dividend history Moving forward $6.00 $5.50 $5.00 Dividend/Share* $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 • $1.50 per quarter or 12% dividend increase announced Jan 2021 • >$1.3B/year of dividends to shareholders expected in 2021 • 39 consecutive years of dividend
Slide 18: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward Up over 1200 basis points 44% 42.7% 41.9% 42% 40.1% 40.3% 40.4% 40% 40.3% 39.2% 37.7% 38% 36.3% 37.5% 35.9% 35.7% 37.3% 36% 35.2% 34.8% 34.9% 34.1% 34.3%35.8% 33.9% 34% 33.2% 34.8% 32.9%33.2% 32% 31.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% Q214 Q314 Q41
Slide 19: Q3 results
Q3 results Moving forward Fav/(Unfav) vs. ($ million) Q3FY21 Q3FY20 Q2FY21 Sales $2,605 26% 4% - Volume 12% 5% - Price 2% 1% - Energy cost pass-through 6% (2%) - Currency 6% -% Adjusted EBITDA* $976 11% 4% - Adjusted EBITDA Margin* 37.5% (520bp) 20bp Adjusted Operating Income* $577 7% 8% - Adjusted
Slide 20: Q3 adjusted EPS
Q3 adjusted EPS* Moving forward Q3FY20 Q3FY21 Change GAAP cont ops EPS $2.01 $2.36 Less: non-GAAP items 0.00 (0.05) Adjusted EPS* $2.01 $2.31 $0.30 Volume 0.26 Price (net of variable costs) 0.05 Other Cost (0.29) $0.02 Currency/FX $0.12 Equity Affiliate Income 0.04 Non-controlling Interest 0.05 Tax
Slide 21: Cash flow focus
Moving forward Cash flow focus ($ million) Q3FY21 LTM Adjusted EBITDA* $3,780 Interest, net* (85) Cash Tax (342) Maintenance Capex* (742) Distributable Cash Flow* $2,611 $11.73/Share* Dividends (1,221) Investable Cash Flow* $1,390 • Almost $12/share of Distributable Cash Flow* • Paid over 45% of Dis
Slide 22: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made, substantial investment capacity remaining Available Now (6/30/21) ($Billion) Total Debt Capacity $ 11.3 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 1.8 Debt ($7.6B) minus cash1 ($5.8B) Additional Available Now $ 9.5 Esti
Slide 23: Industrial Gases - Asia
Moving forward Industrial Gases - Asia Fav/(Unfav) vs. Q3FY21 Q3FY20 Q2FY21 Sales $752 15% 8% - Volume 6% 7% - Price 1% 1% - Energy cost pass-through -% -% - Currency 8% -% Adjusted EBITDA* $356 9% 10% - Adjusted EBITDA Margin* 47.4% (270bp) 100bp Operating Income $219 (1%) 10% - Operating Margin 29
Slide 24: Industrial Gases - Americas
Moving forward Industrial Gases - Americas Fav/(Unfav) vs. Q3FY21 Q3FY20 Q2FY21 Sales $1,063 25% 1% - Volume 9% 6% - Price 4% 1% - Energy cost pass-through 10% (6%) - Currency 2% -% Adjusted EBITDA* $465 13% 4% - Adjusted EBITDA Margin* 43.7% (470bp) 120bp Operating Income $286 15% 9% - Operating Ma
Slide 25: Industrial Gases - EMEA
Moving forward Industrial Gases - EMEA Fav/(Unfav) vs. Q3FY21 Q3FY20 Q2FY21 Sales $623 45% 7% - Volume 24% 5% - Price 1% -% - Energy cost pass-through 8% 1% - Currency 12% 1% Adjusted EBITDA* $212 25% (2%) - Adjusted EBITDA Margin* 34.1% (540bp) (310bp) Operating Income $140 33% -% - Operating Margi
Slide 26: Industrial Gases - Global
Moving forward Industrial Gases - Global Fav/(Unfav) vs. Q3FY21 Q3FY20 Sales $99 $22 Adjusted EBITDA* ($29) ($20) Operating Income ($34) ($20) • Sales up on SOE project activity • Profit down on business mix and higher product development spending * Non-GAAP financial measure. See website for reconc
Slide 27: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q3FY21 Q3FY20 Sales $67 $11 Adjusted EBITDA* ($28) ($11) Operating Income ($35) ($12) • Sales higher on increased project activities • Profit lower on increased corporate costs * Non-GAAP financial measure. See website for reconciliation. 27
Slide 28: Outlook
Moving forward Outlook* Q4 FY21 FY21 Adjusted EPS* vs PY Adjusted EPS* vs PY $2.44 to $2.54 +11% to +16% $8.95 to $9.05 +7% to +8% FY21 Capital Expenditures* = Approx. $2.5 billion Adjusted EPS and Capex guidance do not include the Jazan transaction * Non-GAAP financial measure. See website for reco
Slide 29: 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 29
Slide 30: Appendix slides
Appendix slides 30
Slide 31: Major projects
Major projects Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) H2/CO Geismar, Louisiana 50MMH2+6.5MMCO Q2 FY20 Chem/Pipeline Hydrogen PBF - California & Delaware 300MMSCFD Q3 FY20 Refinery Syngas BPCL Ph 2, India Not disclosed Q1 FY21 Chemicals ASU/H2 Samsung Giheung, Ko
Slide 32: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Q1 $1.79 $1.86 $2.14 $2.12 Q2 $1.71 $1.92 $2.04 $2.08 Q3 $1.95 $2.17 $2.01 $2.31 Q4 $2.00 $2.27 $2.19 $2.44 - $2.54# $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $8.38 $8.95 - $9.05# $9.50 $9.00 $8.50 $8.00 $7.50 $7.00 +7% $6.5
Slide 33: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2021 Approx. $2.5 billion# 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY21 Quarter $MM Q1 $684 Q2 $613 Q3 $636 Q4 * Non-GAAP financial measure. See website for reconciliation. Capital expenditure is calculated independently for e
Slide 34: Thank you
Moving forward Thank you tell me more
Air Products and Chemicals — Q3 2021 Earnings Presentation on 6ix