Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q2 2017 Earnings Presentation
28 slides from Air Products And Chemicals's earnings presentation, Apr 27, 2017
Slide 1: Create Shareholder Value – Q2 FY17 Earnings Conference Call
Moving forward Create Shareholder Value Q2 FY17 Earnings Conference Call April 27 2017
Slide 2: Forward-looking statements
Forward-looking statements Moving forward 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 and business outlook. These forward-looking statements are based o
Slide 3: Safety results
Moving forward Safety results Q217 FY17 vs FY14 FY16 YTD FY14 Employee Lost Time Injury Rate 0.24 0.18 0.03 88% Better Employee Recordable Injury 0.58 0.44 0.32 45% Better Rate FY14 includes MT 3 FY16 & FY17 exclude MT
Slide 4: Our Goal
Moving forward Our Goal Air Products will be the safest and the most profitable industrial gas company in the world, providing excellent service to our customers 4
Slide 5: Creating shareholder value
Creating shareholder value Moving forward 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: Our Plan
Our Plan Moving forward 5 point plan summary Focus on Restructure Change Control Align the core organization culture capital/costs rewards Reward Industrial gases Decentralize Safety Capex performance Geographic EBITDA/value Key geographies Simplicity Hurdle rates alignment creation target Speed Cor
Slide 7: Our key profitability metrics
Moving forward Our key profitability metrics Q2 FY17 EBITDA % margin 32.9% Operating % margin 20.5% ROCE 12.3% Based on continuing ops, non-GAAP 7 measures, see appendix for reconciliation
Slide 8: EBITDA Margin Trend
Moving forward EBITDA Margin Trend 35.9% 36% 35.2% 34.8% 34.7% 33.9% 34% 33.2% 32.9% 32% 31.1% 30% 29.6% 28.7% 28.8% 28% 26.5% 26% 25.1% 24% Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 FY15-17 based on continuing ops FY14 as previously reported, including MT 8 Non-GAAP measures,
Slide 9: Q2 Results
Moving forward Q2 Results Fav/(Unfav) vs. ($ million) Q2FY17 Q2FY16 Q1FY17 Sales $1,980 11% 5% - Volume 7% 3% - IG regional segment impact 2% - Jazan and LNG impact 5% - Price -% -% - Energy cost pass-thru 5% 2% - Currency (1%) -% EBITDA $652 2% -% - EBITDA Margin 32.9% (300bp) (180bp) Operating Inc
Slide 10: Q2 Cash Flow Focus
Moving forward Q2 Cash Flow Focus ($ million) Q2FY16 Q2FY17 Change EBITDA $638 $652 $14 Interest, net (26) (21) 5 Cash Tax (90) (195) (105) Maintenance Capex (57) (98) (41) Distributable Cash Flow $465 $338 ($127) Growth Capex (180) (197) (17) Dividends (175) (187) (12) Free Cash Flow $110 ($46) ($1
Slide 11: Q2 EPS Analysis
Moving forward Q2 EPS Analysis Q2FY16 Q2FY17 Change As reported cont ops EPS $1.28 $1.39 less non-GAAP items (0.09) (0.04) NonGAAP cont ops EPS $1.37 $1.43 $0.06 Volume 0.08 Price / raw materials (0.03) $0.05 Cost - Currency/FX - Equity affiliate income 0.01 Interest expense (0.02) Other non-operati
Slide 12: Balance Sheet update
Moving forward Balance Sheet update ($B) 31 March Total cash $3.3 Tax to be paid on PMD sale gain $0.5 Cash available to invest ~$2.5 Total debt ($3.8) Debt capacity $5.3 - $6.6 Debt capacity available to invest $1.5 - $2.8 Total current investment capacity ~$5 • Commitment to manage debt balance to
Slide 13: Gases Americas
Moving forward Gases Americas Fav/(Unfav) vs. Q2FY17 Q2FY16 Q1FY17 Sales $890 12% 3% - Volume 1% 1% - North America impact 1% - Latin America impact -% - Price 1% -% - Energy cost pass-thru 9% 2% - Currency 1% -% EBITDA $354 4% 1% - EBITDA Margin 39.7% (300bp) (80bp) Operating Income $225 -% -% - Op
Slide 14: Gases EMEA
Moving forward Gases EMEA Fav/(Unfav) vs. Q2FY17 Q2FY16 Q1FY17 Sales $414 (2%) 4% - Volume 1% 2% - Price -% -% - Energy cost pass-thru 3% 3% - Currency (6%) (1%) EBITDA $136 (6%) (2%) - EBITDA Margin 32.9% (160bp) (210bp) Operating Income $87 (4%) (2%) - Operating Margin 20.9% (40bp) (110bp) • Volum
Slide 15: Gases Asia
Moving forward Gases Asia Fav/(Unfav) vs. Q2FY17 Q2FY16 Q1FY17 Sales $436 7% (1%) - Volume 8% (1%) - Price -% -% - Energy cost pass-thru -% -% - Currency (1%) -% EBITDA $174 2% (2%) - EBITDA Margin 40.0% (200bp) (70bp) Operating Income $112 7% (5%) - Operating Margin 25.7% - bp (120bp) • Continued m
Slide 16: Global Gases
Moving forward Global Gases Fav/(Unfav) vs. Q2FY17 Q2FY16 Q1FY17 Sales $217 $130 $69 EBITDA $25 $34 $14 Operating Income $23 $34 $15 • Sales and profits up on Jazan project Based on continuing ops, non-GAAP 16 measures, see appendix for reconciliation
Slide 17: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q2FY17 Q2FY16 Q1FY17 Sales $23 ($40) ($9) EBITDA ($37) ($26) ($11) Operating Income ($40) ($24) ($10) • LNG activity down significantly Based on continuing ops, non-GAAP 17 measures, see appendix for reconciliation
Slide 18: Outlook
Moving forward Outlook FY16 Q3 FY17 Q3 FY16 FY17 EPS EPS Delta EPS EPS Delta $1.55 to Up 8% $6.00 to Up 6% $1.44 $5.64 $1.60 to 11% $6.25 to 11% FY17 Capital Spending = Approx. $1 billion Guidance does not include any significant acquisitions 18 Non-GAAP measures, see appendix for reconciliation
Slide 19: Appendix Slides
Appendix Slides
Slide 20: Major Projects
Major Projects Moving forward Plant Location Capacity Timing Market ONSTREAM (last five quarters) H2 Scotford, Canada 150 MMSCFD H2 Onstream Refinery (Pipeline) ASU/Liquid Big River Steel, Arkansas World Scale Onstream Steel ASU/H2/Liq. Pyeongtaek, Korea – Ph 1 World Scale Onstream Electronics H2/AS
Slide 21: Air Products EPS
Moving forward Air Products EPS FY14 FY15 FY16 FY17 Q1 $1.35 $1.47 Q2 $1.37 $1.43 Q3 $1.44 $1.55 - $1.60 Q4 $1.49 FY $4.42 $4.88 FY $5.64 $6.00 - $6.25 Based on continuing ops, non-GAAP measures, see appendix for reconciliation 21
Slide 22: Capital Expenditure
Moving forward Capital Expenditure FY $MM 2017 Forecast Approx. $1 billion 2016 $935 2015 $1,299 2014 $1,495 2013 $1,740 2012 $1,749 Non-GAAP - includes Capital Expenditures - GAAP basis, plus Capital Lease expenditures and Purchase of non-controlling interests. Excludes $0.7B in 2012 and $0.3B in 2
Slide 23: Appendix: Q217 Results
Appendix: Q217 Results Moving forward ($ Millions, except per share data) GAAP Measure Non GAAP Adjusts. Non GAAP Measure $ % $ % Q217 vs. Q216 - Total Company Q217 Q216 Change Change Q217 (2) Q216 (2) Q217 Q216 Change Change Sales 1,980.1 1,777.4 202.7 11% 1,980.1 1,777.4 202.7 11% Operating Income
Slide 24: Appendix: Adjusted EBITDA Trend
Appendix: Adjusted EBITDA Trend Moving forward Q217 vs PY Q217 vs PQ $ Millions Q116 Q216 Q316 Q416 FY16 Q117 Q217 $ % $ % Income From Continuing Operations 287.2 284.7 255.7 294.4 1,122.0 258.2 310.1 Add: Interest expense 22.2 25.7 35.1 32.2 115.2 29.5 30.5 Less: Other non-operating income (expense
Slide 25: Appendix: Adjusted EBITDA by Segment
Appendix: Adjusted EBITDA by Segment Moving forward Q217 vs PY Q217 vs PQ $ Millions Q116 Q216 Q316 Q416 FY16 Q117 Q217 $ % $ % Gases - Americas Operating Income 211.6 223.5 234.0 224.1 893.2 223.8 224.5 Add: Depreciation and amortization 109.0 109.8 112.1 112.7 443.6 111.8 116.0 Add Equity Affiliat
Slide 26: Appendix: ROCE
Appendix: ROCE Moving forward Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Numerator GAAP Net Income from continuing operations attributable to Air Products (193.8) 249.7 188.4 221.5 273.7 280.9 278.9 250.3 289.4 251.6 304.4 Add Interest Expense Impact Before tax interest expens
Slide 27: Appendix: FY17 EPS Outlook
Appendix: FY17 EPS Outlook Moving forward EPS Outlook Diluted Q317 Guidance vs Prior Year EPS (1) Q316 GAAP $1.15 Business separation costs $0.03 Tax costs associated with business separation $0.22 Cost reduction and asset actions $0.04 Q316 Non GAAP $1.44 Q317 Guidance (2) $1.55-$1.60 % Change 8%-1
Slide 28: Thank you
Moving forward Thank you tell me more
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