Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Barclays Capital Industrial Select Conference 2011
30 slides from Air Products And Chemicals's conference presentation, Feb 8, 2011
Slide 1: Investor Update
Investor Update Paul E. E Huck Senior Vice President and Chi f Fi Chief Financial i l Offi Officer Barclays Capital Industrial Select Conference February 8, 2011
Slide 2: Forward Looking Statement
Forward Looking g Statement Note: This presentation contains "forward-looking statements" within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance, projections and targets. These forward-looking statements are based on management's reason
Slide 3: Additional Information
ADDITIONAL INFORMATION On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), a wholly owned subsidiary b idi off Air Ai Products P d t and d Chemicals, Ch i l Inc. I (“Air (“Ai Products”), P d t ”) commenced d a cash h tender offer for all the outstanding shares of common stock of Air
Slide 4: Air Products At a Glance
Air Products At a Glance Business us ess Seg Segment e t Sa Sales es Geographic g p Sales 33% 22% 39% 5% 41% 21% 32% 7% Tonnage United States Merchant Canada/Latin America Electronics & Performance Materials Europe Asia Equipment & Energy • $9B company • Diverse markets and geographies • Positioned
Slide 5: Q1 Financials
Q1 Financials Q Fav/(Unfav) vs. ($millions, excluding items) Q1 FY11 Q1 FY10 Q4 FY10 Sales $2,392 10% 2% - Volume 10% -% - Price P i 1% 1% - Energy/RM pass-thru -% (1%) - Currency (1%) 2% Operating Income $404 17% 1% O Operating ti M Margin i 16 9% 16.9% 100b 100bp (20b ) (20bp) Net Income $296 17%
Slide 6: Air Products Value Proposition
Air Products Value Proposition p Profitable Growth • Stability - Long term contracts - Consistent and predictable cash flows - Strong balance sheet • Growth - Energy opportunities - Environmental solutions - Emerging markets • Improving I i returns t - Margin improvement - Productivity - Increasing
Slide 7: Air Products Supply Modes
Air Products Supply pp y Modes Stability and Profitable Growth Onsite/Pipeline Package Gases & Specialty Materials 27% 40% 12% 21% 15-20 15 20 year Contracts Short-Term Short Term Contracts Limited Volume Risk Differentiated Positions Energy Pass through Onsite/Pipeline Liquid/Bulk d/ lk Equipment E
Slide 8: Macro Trends Drive Growth
Macro Trends Drive Growth Hydrogen Large-scale O2 Electronic Clean Water Energy Materials • Leading • Clean / efficient • Semiconduct • Wastewater, refinery H2 combustion or and TFT TFT- drinking water supplier • Gasification LCD and water • Leader in H2 (IGCC, GTL, materials reuse fueling CTL, CTC)
Slide 9: Integrated Industrial Gas Model provides real benefits
Integrated Industrial Gas Model provides real benefits – locally and globally Supply S l Ch Chain i Market M k t Global Gl b l Leverage Tonnage/ Opportunity Scale Onsites • Co Co-product product • New segments • Innovation economics − PG only • Productivity • Liquid − Bundled and best back-upp • Sal
Slide 10: Integrated Model in China
Integrated g Model in China Weihe PCEC • Onsite O2 & N2 • Largest Onsite • Liquid integration • Liquid integration Xingtai Steel • Existing Asset Purchase Beijing • New ASU • Liquid integration Xi’an Chengdu Shanghai PetroChina Guangzhou • First outsourced H2 for China Sanan Optoelectronics state ow
Slide 11: Equity Affiliates
Equity q y Affiliates $2.3B revenue on 100% basis Important Source of Growth Italy Mexico India Thailand South Africa 11
Slide 12: Air Products: #1 Global H2 Position in high growth market
Air Products: #1 Global H2 Position in high growth market • Maintained a ta ed 40+% 0 % share s a e over o e 20 0 years yea s (2 ( x closest c osest competitor) co pet to ) • Significant Global Pipeline Networks • Highly probable Market Growth Drivers On-stream 2020 Increased On-stream Heavy Transpo
Slide 13: Global H2 Market Growth
Global H2 Market Growth* ~10 BSCFD More geographically dispersed vs. earlier H2 investments 2800 MM scfd 800 MM scfd U.S. & Canada Europe 2500 MM scfd Asia 1500 MM scfd Latin America 2500 MM scfd Middle East & India *Based on estimates of H2 2008 -2018 awards, 13 on-stream by 2020
Slide 14: Hydrogen Pipeline Networks
Hydrogen y g Pipeline p Networks Leading Global Hydrogen Provider Increasing Edmonton, Canada Refineries Global Sarnia, Canada Competitiveness p via: Rotterdam • Higher Reliability Louisiana Thailand • Greater Southern Flexibility Singapore g p C lif California i • Improved I d Texas Efficiency • Ec
Slide 15: USGC H2 Pipeline Networks - 2010 / 2012
Air Products ((Texas-Louisiana)) USGC H2 Pipeline Networks - 2010 / 2012 TEXAS ExxonMobil • > 1billion SCFD LOUISIANA Baton Rouge of capacity ExxonMobil Motiva Marathon ExxonMobil Beaumont • > 20 plants l t Luling-2012 Geismar Lake Charles Motiva, • > 600 miles of ConocoPhillips, Citgo g Valero pipe
Slide 16: Tonnage Gases
Tonnage g Gases Significant New Markets for Oxygen • Stee Steel New Market - Asian infrastructure growth Growth for - Mill modernization Oxygen • Gasification 15% - Power - Feedstock independence 40% - Low BTU hydrocarbons 45% • Cleaner coal - Power - CO2 capture Steel Gasification 200,000-300,000 2
Slide 17: Merchant Gases
Merchant Gases Strong growth in Asia • Largest a gest Liquid/Bulk qu d/ u Share S a e in China C a among a o g China Liquid global majors Share 2009 – Majors • Leading Merchant positions in Taiwan, Korea and Thailand • Leading Merchant Gases supplier in India • Generating growth through applications
Slide 18: Merchant Gases: Applications technology drives higher growth
Merchant Gases Applications technology drives higher growth Benefits Markets Applications Quality Productivity Environment Cleanfire® HRi™ Burner Glass Freshline® Dual Mode Freezer Food NitroFAS™ II Wave soldering Electronic Packaging enhancement O2 Proprietary Nozzles Cement For a
Slide 19: Electronics Revenue > $1Billion
Electronics Revenue > $1Billion $ Onsite Gas Supply FY10 Revenue 60% Specialty Gases & Chemicals 29% 11% Enabling Equipment Services Onsite Gas Supply Specialty Gases & Chemicals Enabling Equipment 19
Slide 20: Electronics: High Growth Markets
Electronics High Growth Markets • Growth across all key markets 150% LED - IC silicon (MSI) = 8% PV - TFT-LCD = 12% 100% TFT-LCD - PV = 25% Silicon ((MSI)) - LED = 30% 50% • Majority positions with 0% industry y leaders - #1 in IC, TFT-LCD and 2010 2011 2012 2013 foundry • #1 in Electronic industry
Slide 21: Performance Materials
Performance Materials Earth-Friendly Solutions Replacing Toxic Higher Efficiency Renewable or Emitting Insulation Content Materials Materials • Water-based • Reduced energy • Natural-based construction consumption surfactants for materials • Lower carbon I&I cleaning • Low emission footprint • Enabl
Slide 22: Energy & Equipment
Energy & Equipment L Leveraging i S Sustainable t i bl GlGlobal b lTTrends d Alt Fuel Energy from Carbon BF Plus H2/CNG/ W t Waste C t Capture and d LNG/HCNG Storage Existing Leverage Leveraging Products + Experience and Leadership New Offering Innovation : Technology for and External for Steel Solu
Slide 23: Sustainability at Air Products
Sustainability y at Air Products Environmental Social Business Value Stewardship Responsibility Governance Providing Responsibly Improving Working with innovative managing the quality of integrity and solutions for our footprint life for our accountability the world world’s s through employees for o
Slide 24: Outlook
Outlook FQ1 2011 EPS $1.35 • New plants on-stream • Improving economy EPS • Higher Equity Affiliates • Lunar new year • Higher tax rate EPS FQ2 2011 EPS $1.36-$1.40 FY 2011 EPS $5.55-$5.70 24 Non-GAAP, see appendix for reconciliation.
Slide 25: The Air Products opportunity
The Air Products opportunity pp y Stability Growth Results • Long term contracts, • Solid backlog and consistent i t t andd strong growth predictable cash flow opportunities in all • Double-digit EPS • Diversified across geographies growth markets, geographies • New growth • ROCE 3-5% above cost and
Slide 26: Appendix Slides
Appendix pp Slides
Slide 27: Appendix: Q1 FY11 Results and Guidance
Appendix: Q1 FY11 Results and Guidance ($ Millions, except per share data) Non GAAP GAAP Measure Adjustments Non GAAP Measure $ % $ % Q111 vs. Q110 - Total Co. Q111 Q110 Change Change Q111 (1) Q111 Q110 Change Change Sales 2,391.7 2,173.5 218.2 10% 2,391.7 2,173.5 218.2 10% Operating Income 360.6 34
Slide 28: Appendix: ROCE
Appendix: ROCE $ Millions Q Quarter t Ended E d d Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Numerator Operating Income Reported 260.4 143.8 328.0 345.0 340.6 336.4 367.0 360.6 Equity Affiliate Income 27.0 28.5 32.2 26.9 32.2 32.5 35.3 27.8 Earnings before tax as reported 287.4 172.3 360.2 371.9 3
Slide 29: Appendix: ROCE Tax Rate
Appendix: ROCE Tax Rate Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Reported Income Before Taxes 257.4 257 4 144.8 144 8 332.3 332 3 340.3 340 3 343.3 343 3 338.9 338 9 371.5 371 5 357.4 357 4 Tax Expense 66.5 25.4 86.3 83.5 84.9 77.6 93.5 81.5 Tax Rate Reported 25.8% 17.5% 26.0% 24.5% 24.7% 22.9% 25.2%
Slide 30: Thank you... tell me more
Thank you... tell me more AIR ,/. PRODUCTS Z
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