Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q1 2022 Earnings Presentation
30 slides from Air Products And Chemicals's earnings presentation, Feb 4, 2022
Slide 1: Create Shareholder Value - Q1 FY22 Earnings Conference Call
Moving forward Create Shareholder Value Q1 FY22 Earnings Conference Call February 4, 2022
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 Q1FY22 vs FY14 Q1FY22 FY14 Employee Lost Time Injury Rate 0.24 0.15 38% better Employee Recordable Injury Rate 0.58 0.43 26% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: 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 4
Slide 5: 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 6: 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 7: Making Our Dream a Reality
Moving forward Making Our Dream a Reality Our dream of the future is for Air Products to be the leader in providing solutions to the world’s significant energy and environmental challenges through Gasification, Carbon Capture and Clean Hydrogen. 7
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: "Third by '30" Carbon Intensity Goal
Moving forward “Third by ’30” Carbon Intensity Goal 2015 92 (kg CO2e/MM BTU) 61 (kg CO2e/MM BTU) 2030 Goal -33% Significant improvement later in 2020 Reduction of 5% decade as key projects come onstream 9
Slide 10: Air Products adjusted EPS
Moving forward Air Products adjusted EPS* $11.00 +13% to +15% $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $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 Guidance 10 * Non-GAAP financial measure. See website for reconciliation.
Slide 11: Dividend/Share history
Dividend history Moving forward 40 consecutive years of dividend increases $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 • 8% or $0.12 per quarter dividend increase announced Feb 2022 (to $1.62 per quarter) • >$1.4B of divide
Slide 12: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward 44% 42.7% 41.9% 42% 40.1% 40.4% 40% 40.3% 40.3% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36% 34.8% 36.6% 34.9% 35.8% 35.7% 33.9% 34.3% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% Q214 Q314 Q414 Q115 Q215
Slide 13: Q1: Positioned for Growth
Q1: Positioned for Growth Moving forward • Segment Re-organization - New Middle East & India - Corporate now includes Global Gases • Jazan Joint Venture (JIGPC) - Phase I closed Oct 27, 2021 - Equity Affiliate Income - Interest Income from shareholder loans (from Air Products) included in Non-operat
Slide 14: Q1 Results
Q1 Results Moving forward Fav/(Unfav) vs. ($ million) Q1FY22 Q1FY21 Q4FY21 Sales $2,994 26% 5% - Volume 8% (3%) - Price 5% 2% - Energy cost pass-through 14% 7% - Currency (1%) (1%) Adjusted EBITDA* $1,003 8% (4%) - Adjusted EBITDA Margin* 33.5% (570bp) (310bp) Adjusted Operating Income* $523 (3%) (1
Slide 15: Q1 Adjusted EPS
Q1 Adjusted EPS* Moving forward Adjusted EPS* Up 19% vs. PY Q1FY21 Q1FY22 Change GAAP cont ops EPS $2.12 $2.52 Less: non-GAAP items 0.00 0.00 Adjusted EPS* $2.12 $2.52 $0.40 Volume 0.19 Price (net of variable costs) (0.04) Other Cost (0.21) ($0.06) Currency/FX $0.00 Equity Affiliate Income 0.29 Non-
Slide 16: Cash flow focus
Moving forward Cash flow focus ($ million) Q1FY22 LTM Adjusted EBITDA* $3,954 Interest, net* (58) Cash Tax (367) Maintenance Capex* (756) Distributable Cash Flow* $2,773 $12.46/Share* Dividends (1,293) Investable Cash Flow* $1,480 • ~ $12.50/share of Distributable Cash Flow* • Paid over 45% of Distr
Slide 17: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made, substantial investment capacity remaining Available Now (12/31/21) ($Billion) Total Debt Capacity $ 11.9 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 3.7 Debt ($7.4B) minus cash1 ($3.7B) Additional Available Now $ 8.2 Est
Slide 18: Asia
Moving forward Asia Fav/(Unfav) vs. Q1FY22 Q1FY21 Q4FY21 Sales $780 9% 4% - Volume 4% -% - Price 3% 3% - Energy cost pass-through -% -% - Currency 2% 1% Adjusted EBITDA* $339 2% 2% - Adjusted EBITDA Margin* 43.4% (280bp) (40bp) Operating Income $221 3% 7% - Operating Margin 28.3% (160bp) 100bp • Ver
Slide 19: Europe Energy Costs Up 4x – 5x
Europe Energy Costs Moving forward Up 4x – 5x Europe Power and Natural Gas Index (Jan21 = 100) 600 500 400 300 200 100 0 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Power Natural Gas 19 Power based on published country day-ahead power prices for those countrie
Slide 20: Europe
Moving forward Europe Fav/(Unfav) vs. Q1FY22 Q1FY21 Q4FY21 Sales $744 37% 16% - Volume 5% (1%) - Price 9% 6% - Energy cost pass-through 27% 14% - Currency (4%) (3%) Adjusted EBITDA* $163 (19%) (19%) - Adjusted EBITDA Margin* 21.9% (1,520bp) (920bp) Operating Income $99 (28%) (21%) - Operating Margin
Slide 21: Americas
Moving forward Americas Fav/(Unfav) vs. Q1FY22 Q1FY21 Q4FY21 Sales $1,224 31% 10% - Volume 8% 1% - Price 3% -% - Energy cost pass-through 20% 9% - Currency -% -% Adjusted EBITDA* $457 14% (4%) - Adjusted EBITDA Margin* 37.3% (560bp) (540bp) Operating Income $267 18% (8%) - Operating Margin 21.8% (24
Slide 22: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q1FY22 Q1FY21 Q4FY21 Sales $24 $4 ($6) Operating Income $5 $1 ($6) Equity Affiliate Income $92 $71 $70 Adjusted EBITDA* $103 $72 $64 • Equity Affiliate Income higher driven by the Jazan Joint Venture • Sales and Op Income better vs. prior year due t
Slide 23: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q1FY22 Q1FY21 Sales $222 $60 Adjusted EBITDA* ($58) ($26) Operating Income ($69) ($26) • Sales higher on increased project activities • Profit lower on increased costs and the settlement of a supply contract in prior year 23 * Non-GAAP financial mea
Slide 24: Outlook
Moving forward Outlook* Q2 FY22 FY22 Adjusted EPS* vs PY Adjusted EPS* vs PY $2.30 to $2.40 +11% to +15% $10.20 to $10.40 +13% to +15% FY22 Capital Expenditures* = $4.5 to $5.0 billion 24 * Non-GAAP financial measure. See website for reconciliation.
Slide 25: 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 25
Slide 26: Appendix slides
Appendix slides 26
Slide 27: Major Projects
Major Projects Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) Syngas BPCL Ph 2, India Not disclosed Q1 FY21 Chemicals ASU/H2 Samsung Giheung, Korea World Scale Q2 FY21 Electronics ASU/Liquid Big River Steel, Arkansas >250 TPD + liquid Q3 FY21 Steel/Merchant Liquid H2 La
Slide 28: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q1 $1.79 $1.86 $2.14 $2.12 $2.52 Q2 $1.71 $1.92 $2.04 $2.08 $2.30 - $2.40# Q3 $1.95 $2.17 $2.01 $2.31 Q4 $2.00 $2.27 $2.19 $2.51 $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $8.38 $9.02 $10.20 - $10.40# $11.00 $10.00 $9.00
Slide 29: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2022 $4.5 - $5.0 billion# 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY22 Quarter $MM Q1 $2,331a Q2 Q3 Q4 * Non-GAAP financial measure. See website for reconciliation. # Outlook a. Q1FY22 CAPEX includes $0.1B of minor
Slide 30: Thank you
Moving forward Thank you tell me more
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