Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Oppenheimer 3rd Annual Industrials Conference 2008
19 slides from Air Products And Chemicals's conference presentation, Oct 2, 2008
Slide 1: Jeffry L. Byrne, VP/GM Tonnage Gases
Jeffry L. Byrne VP/GM, Tonnage Gases Oppenheimer 3rd Annual Industrials Conference October 2, 2008
Slide 2: Forward-Looking Statements
Forward-Looking Statements Note: This document contains “forward-looking statements” including, without limitation, statements about the company’s expected fiscal fourth quarter results. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date
Slide 3: Air Products At a Glance
Air Products At a glance $10B in revenues Diverse markets and geographies Positioned for continued long-term value creation FY07 Segment Sales FY07 Geographic Sales ROW (2%) Asia Merchant Tonnage (17%) Gases Gases (34%) (31%) United States (44%) Healthcare Europe (7%) Electronics & (32%) Perfo
Slide 4: APD Transformation Creating Shareholder Value
APD Transformation Creating Shareholder Value FY00 Sales FY07 Sales $5.7B $9.4B Merchant Tonnage Merchant Tonnage Electronics & Perf Mat’ls Healthcare Chemicals Equipment & Energy Healthcare Electronics & Equipment Performance & Energy Materials 4
Slide 5: Air Products Value Proposition
Air Products Value Proposition Profitable Growth Stability – Long term contracts – Consistent and predictable cash flows – Strong balance sheet Growth – Solid project backlog – High bidding activity – Energy opportunities Improving returns – Margin improvement – Productivity – Increasing divid
Slide 6: Supply Modes Durable Business Models
Supply Modes Durable Business Models 10, 15 and 20-year contracts Take-or-pay minimum volumes Contractual energy Equipment & pass-through Services Formula escalation Onsite/Pipeline 18% 36% 3-5 year contracts Package Gases & Liquid/Bulk Regional business Specialty Materials 21% Cost pass-through/sur
Slide 7: A Healthy Report Card
A Healthy Report Card Four consecutive years FY04 FY05 FY06 FY07 Sales ($B)……………… $6.4 $7.1 $8.2 $9.4 EPS ($/share)……....... $2.45 $2.80 $3.35 $4.20 ORONA (%) ………….. 11.3% 12.4% ROCE (%)…………….. 11.2% 12.3% SG&A / Sales (%)…… 14.7% 14.2% 12.8% 12.2% Balance Sheet…………. “A” rating Shareholder Value…….
Slide 8: Merchant Gases Strong Growth & Performance
Merchant Gases Strong Growth & Performance $MM $MM 12% CAGR Revenue by Region ($, FY07) Europe LB • Continue delivering double-digit growth Europe PG Solid growth in Asia North America Expanding in Eastern/Central Europe New offerings success Asia Equipment ROW • Achieve 20% operating margins 8
Slide 9: Electronics & Performance Materials Performance Improvement
Electronics & Performance Materials Performance Improvement $MM $MM 11% CAGR Revenue by Region ($, FY07) • Profit and return improvement driven largely by Electronics turn-around Asia (40%) • Continue delivering double-digit growth North America (40%) • Growth in Photovoltaics Latin America • Achiev
Slide 10: Tonnage Gases High Growth Segment
Tonnage Gases High Growth Segment $MM $MM 16% CAGR Investment by Region • Significant profit growth and improvement North America in returns on capital while bringing on new investments • Significant large plant bidding Europe & opportunities (both H2 & O2) continue Middle East Asia • Anticipate con
Slide 11: Refining Hydrogen and Energy Driving Hydrogen Growth
Refining Hydrogen and Energy Driving Hydrogen Growth Transport fuels growth 15% More heavy, sour crude 15% 45% Clean fuels legislation 25% Increased outsourcing trend Future opportunities Conversion Crude – Gasification Clean Fuels – GTL Outsourcing – Oil sands – Non-conventional fuels 11
Slide 12: Major Hydrogen Pipeline Positions – US / Canada / Europe
Major Hydrogen Pipeline Positions – US / Canada / Europe Canada Sarnia 40 Baton Rouge 40 Louisiana Edmonton, Suncor Plaquemine Canada Air Products Canada 40 Geismar Shell Refinery Geismar 16 10 Lake Pontchartrain 16 ST. Cosmar CLAIR Convent RIVER Imperial Oil Petro-Canada Nola New Orleans Taft Sherw
Slide 13: Hydrogen Plant Integration Adds Significant Value
Hydrogen Plant Integration Adds Significant Value Steam Power H2 to to Others to Grid Pipeline Hydrogen Steam REFINERY Power HC Feeds H2 Offgas Fuel Air Products H2 / cogen plant
Slide 14: Tonnage Gases Leading the Way on Gasification
Tonnage Gases Leading the Way on Gasification APD is one of the largest suppliers of oxygen to gasification facilities around the world (>10 large units) Designed, built, own and operate units in Texas for syngas, H2 and CO for pipeline systems: – NG based POX units (LaPorte) – Syngas cleanup /
Slide 15: Air Products Outlook
Air Products Outlook Future demand drivers are strong – High energy costs efficiencies – High capital costs debottlenecking – Environmental pressures new applications Globally well positioned with market leadership – Hydrogen for clean fuels – Oxygen for gasification – Electronics 15
Slide 16: Margin Improvement Goal
Margin Improvement Goal 17% 14% 2007 2010 300 BP Operating Margin Improvement from … Plant Cost Improved Efficiency Reduction Mix 50BP 200BP 50BP 16
Slide 17: Capital Spending Outlook
Capital Spending Outlook FY2008 PP&E CapEx $1.2B Capital leases 0.2 Total $1.4B FY2009 Forecast Total $1.7-$2.0B On-site includes long-term contracts reported in our Tonnage, Electronics and Merchant Gas business segments. Merchant includes liquid & bulk gas, packaged gas, specialty and performance
Slide 18: 2009 and Beyond: Sustainable Double-Digit Growth at Superior Returns
2009 and Beyond Sustainable Double-Digit Growth at Superior Returns Targeting sustainable double-digit EPS growth ● Targeting a total of 300BP margin improvement in FY’07 – FY’10 – Cost reduction and SG&A improvement – Improved business mix – Plant efficiency / incremental expansions Targeting a
Slide 19: Thank you
Thank you tell me more www.airproducts.com
Air Products and Chemicals — Oppenheimer 3rd Annual Industrials Conference 2008 on 6ix