Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Jefferies 2015 Industrials Conference
27 slides from Air Products And Chemicals's conference presentation, Aug 11, 2015
Slide 1: Create Shareholder Value
Moving forward Create Shareholder Value Scott Crocco Senior Vice President and Chief Financial Officer Jefferies 2015 Industrials Conference 11 August 2015
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: Air Products today
Moving forward Air Products today $10.4 21,600 50+ billion in sales employees countries 276 7+ 170,000+ On Fortune 500 list decades in business customers 1800 750+ 30+ miles of industrial production industries gas pipeline facilities served 3
Slide 4: Air Products is…
Moving forward Air Products is… …a leader in the global industrial gas industry with: • Established leading positions in diverse end markets, including energy, chemicals, electronics and manufacturing • Growth opportunities driven by Energy, Environmental and Emerging markets • Complementary materia
Slide 5: APD global presence
Moving forward APD global presence U.S./Canada 43% Europe 25% 25% Asia Latin America 7% 5
Slide 6: APD supply modes
Moving forward APD supply modes 40% On-site/Pipeline •15-20 year contracts •Limited volume risk •Energy pass-through 21% Liquid Bulk •3-5 year contracts •Local supply chain 13% Packaged Gas •Short-term contracts •Local supply chain 6% Equipment & Services •Sale of equipment •PO based 20% Materials T
Slide 7: APD Joint Ventures
Moving forward APD Joint Ventures Profitable joint ventures with leadership positions in emerging markets South Saudi Mexico Italy India Thailand Africa Arabia Sales $0.9 $0.6 $0.2 $0.15 $0.15 $0.15 ($B, 100%) AP 40% 49% 50% 25% 50% 49% Ownership Air Products Equity Affiliates1 Combined2 FY 2014 (as
Slide 8: Innovation in LNG
Moving forward Corporate Segment Innovation in LNG Reshape markets and serve emerging needs • Full range of process options: from peak-shavers to mega-trains • Technology of choice for emerging floating LNG market • Recent wins in US, Malaysia, China and Russia, solid backlog, strong bidding activit
Slide 9: Our Mission: Create Shareholder Value
Moving forward Our Mission Create Shareholder Value 9
Slide 10: 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 10
Slide 11: Creating value for shareholders
Moving forward Creating value for shareholders How are we going to do it at Air Products? • Responsible allocation of capital • Implementation of our 5 point plan 11
Slide 12: 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 Focus Capital allocation is the most important job of the CEO. Opera
Slide 13: Our plan
Moving forward Our plan 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 14: Q3 Summary
Moving forward Q3 Summary FY14 FY15 Q3 Q3 Change Sales $millions $2,635 $2,470 (6%) EBITDA $millions $696 $758 +9% EBITDA % margin 26.4% 30.7% +430bp Free Cash Flow $millions $(71) $16 +$87 EPS $/share $1.46 $1.65 +13% Based on continuing ops., non-GAAP 14 measures, see appendix for reconciliation
Slide 15: EBITDA Margin Trend
Moving forward EBITDA Margin Trend 32% 31% 30.7% 30% 29.4% 29% 28.6% 28.2% 28% 27% 26.4% 26% 25% 25.0% 24% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 15
Slide 16: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) Q3 FY14 Q3 FY15 Change EBITDA $696 $758 $62 Interest $(31) $(28) $3 Cash Tax $(54) $(106) $(52) Maintenance Capex $(73) $(56) $17 Distributable Cash Flow $538 $567 $29 Growth Capex $(445) $(377) $68 Dividends $(164) $(174) $(10) Free Cash Flow $(71) $16 $87
Slide 17: Cash returned to shareholders
Moving forward Cash returned to shareholders Dividend (Per Share) Dividends and share repurchases $3.50 $3.00 • 30+ years of increasing dividends • Long history of share repurchases $2.50 ‒ $3.5 B since 2005 $2.00 • Capital returned to shareholders ‒ Almost $8 B since 2005 $1.50 $1.00 $0.50 $- 1985
Slide 18: Our competitive advantage
Moving forward Our competitive advantage The only sustainable element of long-term competitive advantage is the degree of commitment and motivation of the people in the enterprise 18
Slide 19: Thank you
Moving forward Thank you tell me more
Slide 20: Appendix Slides
Appendix Slides
Slide 21: Q3 Summary
Moving forward Q3 Summary Fav/(Unfav) vs. ($ million) Q3 FY15 Q3 FY14 Q2 FY15 Sales $2,470 (6%) 2% - Volume 3% 2% - Price 1% -% - Energy/Raw Mat’l pass-thru (4%) -% - Currency (6%) -% EBITDA $758 9% 7% - EBITDA Margin 30.7% 430bp 130bp Operating Income $482 17% 9% - Operating Margin 19.5% 380bp 120b
Slide 22: Appendix: Q315 Results
Appendix: Q315 Results Moving forward ($ Millions, except per share data) GAAP Measure Non GAAP Adjustments (2) Non GAAP Measure $ % $ % Q315 vs. Q314 - Total Company Q315 Q314 Change Change Q315 Q315 Q314 Change Change Sales 2,470.2 2,634.6 (164.4) (6%) 2,470.2 2,634.6 (164.4) (6%) Operating Income
Slide 23: Appendix: Adjusted EBITDA Trend
Appendix: Adjusted EBITDA Trend Moving forward Q315 vs PY Q315 vs PQ $ Millions Q114 Q214 Q314 Q414 FY14 Q115 Q215 Q315 $ % $ % Income From Continuing Operations 296.0 291.5 323.5 77.5 988.5 337.5 296.9 333.2 Add: Interest expense 33.3 31.5 31.3 29.0 125.1 29.1 23.4 28.2 Add: Income tax provision 94
Slide 24: Appendix: Adjusted EBITDA by Segment
Appendix: Adjusted EBITDA by Segment Moving forward Q315 vs PY Q315 vs PQ $ Millions Q114 Q214 Q314 Q414 FY14 Q115 Q215 Q315 $ % $ % Gases - Americas Operating Income 184.5 169.6 188.9 219.6 762.6 211.2 182.0 206.5 Add: Depreciation and amortization 104.0 99.4 105.6 105.4 414.4 103.6 103.3 103.9 Add
Slide 25: Appendix: ROCE
Appendix: ROCE Moving forward $ Millions Quarter Ended Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Numerator Operating Income Reported 389.7 383.1 179.2 385.6 384.7 413.8 144.1 430.0 374.4 422.5 Equity Affiliate Income 39.8 44.2 42.4 38.2 30.4 43.1 39.7 43.1 33.0 42.4 Earnings before tax
Slide 26: Appendix: ROCE Tax Rate
Appendix: ROCE Tax Rate Moving forward ($ Millions) Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Reported Income Before Taxes 394.3 391.9 186.2 390.5 383.6 425.6 154.8 444.0 384.0 436.7 Tax Expense 95.8 94.1 25.8 94.5 92.1 102.1 77.3 106.5 87.1 103.5 Tax Rate Reported 24.3% 24.0% 13.9% 24.2% 24
Slide 27: Thank you
Moving forward Thank you tell me more
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