Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Barclays 2nd Annual Industrial Select Conference (February 2010)
37 slides from Air Products And Chemicals's conference presentation, Feb 18, 2010
Slide 1: Barclays 2nd Annual Industrial Select Conference
Barclays 2 nd Annual Industrial Select Conference John E. McGlade, Chairman, President and CEO February 17,
Slide 2: Additional Information
Barclays 2 nd Annual industrial Select Conference ADDITIONAL INFORMATION • On February 11, 2010, Air Products Distribution, Inc., a wholly owned subsidiary of Air Products and Chemicals, Inc. ("Air Products"), commenced a cash tender offer for all the outstanding shares of common stock of Airgas, In
Slide 3: Certain Information Regarding Participants
Barclays 2 nd Annual industrial Select Conference CERTAIN INFORMATION REGARDING PARTICIPANTS • [Air Products] and certain of its respective directors and executive officers may be deemed to be participants in the proposed transaction under the rules of the SEC. Security holders may obtain informatio
Slide 4: Forward-Looking Statements
Barclays 2 nd Annual industrial Select Conference Forward-Looking Statements • All statements included or incorporated by reference in this communication other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our c
Slide 5: Offer to Acquire Airgas
Offer to Acquire Airgas
Slide 6: Airgas transaction highlights
Barclays 2 nd Annual industrial Select Conference Consideration All-cash offer for all Airgas shares at $60.00 per share Premium Premium of 38% to Airgas’ closing price on 2/04/10 of $43.53 Accretion Expected to be substantially accretive to Air Products cash EPS in year one Synergies Substantial co
Slide 7: Compelling strategic and industrial logic
Barclays 2 nd Annual industrial Select Conference Compelling strategic and industrial logic Creates one of the world’s leading integrated industrial gas companies • Largest industrial gas company in North America • Diversified across geographies and distribution channels with competitive positions i
Slide 8: Airgas at a glance
Barclays 2 nd Annual industrial Select Conference Revenue (FY2009) $4.3B Total CAGR (over last 5 years) 19% Same Store Sales Growth 7% Airgas at a glance Broad Coverage - 1,500 Sales Representatives Source: Based on Airgas public disclosures
Slide 9: A world leading integrated industrial gas company
Barclays 2 nd Annual industrial Select Conference Pro-forma Air Products Airgas Revenues Air Products Revenues A world leading integrated industrial gas company Source: Based on Airgas public disclosures Packaged Gas 90% Liquid/Bulk 10% Pro-forma Air Products Airgas Revenues Air Products Revenues Li
Slide 10: Synergies
Barclays 2 nd Annual industrial Select Conference Synergies Supply Chain • Consolidate filling locations • Consolidate specialty gas plant locations • Move from local delivery to hub and spoke • Combine purchasing requirements • Utilize Shared Services for Packaged Gas operations and Project Managem
Slide 11: Growth acceleration
Barclays 2 nd Annual industrial Select Conference Growth acceleration • New Offerings for US Packaged Gases – Integra ® cylinders – 300 BAR cylinders • Further expand Air Products’ offerings into key industries – Fabrication - Analytical – Construction - Medical – Pharmaceuticals - Food and Beverage
Slide 12: North America remains a major growth area
Barclays 2 nd Annual industrial Select Conference North America remains a major growth area GDP growth Japan Europe North America Asia (excl. Japan) ROW GDP growth by location 2009 2013 Growth % of World 09-'13 CAGR World 49,115 55,903 6,788 100.0% 3.3% Europe 16,616 17,907 1,291 19.0% 1.9% Asia 12,
Slide 13: Key measures
Barclays 2 nd Annual industrial Select Conference Key measures • Transaction accretive in the first year • Solid shareholder value • Excludes transaction and integration costs • Synergies enable greater cash flow generation • Combination provides for significant margin benefits Accretion/Dilution EB
Slide 14: Path forward
Barclays 2 nd Annual industrial Select Conference Path forward . . . Air Products committed to completing the transaction Litigation • Commenced litigation in Delaware Tender offer • Offer commenced Feb 11 • Financing committed Regulatory process • Prepared to make appropriate divestitures Proxy con
Slide 15: Air Products Financial Performance
Barclays 2 nd Annual industrial Select Conference FY04 thru FY08 H109 H209 Q110 Sales ( CAGR/ % chg vs PY ) 14% (16%) (25%) (1%) Operating Margin * 12.8% 1.8% 14.6% 13.2% 15.5% 15.9% EPS Cont Ops.* 21% (24%) (16%) 20% ROCE (4 quarter trailing) * 9.6% 3.4% 13.0% ROCE (instantaneous) * 10.0% 11.2% 11.
Slide 16: We have Multiple Growth Opportunities
Barclays 2 nd Annual industrial Select Conference We have Multiple Growth Opportunities l Hydrogen for refining l Oxygen for gasification l LNG heat exchangers Energy Environment Emerging Markets l Oxyfuel l Carbon capture l Multiple Gas Applications l Electronics across Asia l Equity Affiliate posi
Slide 17: Merchant Business – At a glance
Barclays 2 nd Annual industrial Select Conference Merchant Business – At a glance • 2009 revenue of $3.6B • Global business plus 5 large JVs • Achieved 18.3% operating margin in FY’09 • Goals: – 20% operating margin by FY’11 – Sustained annual growth: 10% Applications expertise drives growth
Slide 18: Merchant Business Applications Driven Growth
Barclays 2 nd Annual industrial Select Conference Cleanfire ® HR i ™ burner Efficient oxygen plant design Merchant Business Applications Driven Growth A winning combination!
Slide 19: Merchant Business Winning New Customers
Barclays 2 nd Annual industrial Select Conference Merchant Business Winning New Customers with Industrial Gases Integra ® Cylinders
Slide 20: Tonnage Gases – At a glance
Barclays 2 nd Annual industrial Select Conference Tonnage Gases – At a glance • 2009 revenue of $3.1B • Leading supplier of refinery hydrogen • Primary end markets – Refining – Chemicals – Steel • Expect 10% H 2 and O 2 growth long term Exciting growth opportunities in all major regions of the world
Slide 21: Tonnage Gases Hydrogen Fueling Growth
Barclays 2 nd Annual industrial Select Conference Tonnage Gases Hydrogen Fueling Growth for the Future • Transport fuels growth • Heavier, sour crude slate • Clean fuels legislation • Outsourcing trend Conversion 45% Crude 25% Clean Fuels 15% Outsourcing 15%
Slide 22: Leading Global Hydrogen Positions
Barclays 2 nd Annual industrial Select Conference Tonnage Gases Leading Global Hydrogen Positions Southern California Edmonton, Canada Sarnia, Canada Texas Louisiana Rotterdam
Slide 23: Steel, gasification and cleaner coal oxygen demand
Barclays 2 nd Annual industrial Select Conference • Steel – Asian infrastructure growth – Mill modernization • Gasification – Power – Feedstock independence – Low BTU hydrocarbons • Cleaner coal – Power – CO2 capture 200,000-300,000 tons-per-day new oxygen capacity by 2018 100 + new plants
Slide 24: Projected projects and customers
Barclays 2 nd Annual industrial Select Conference Projected • Marathon Garyville • XOM Baton Rouge • Total Port Arthur • XOM Baytown • MarkWest Texas Projected 2011-2012 • XOM Rotterdam • Shell Rotterdam • Marathon Detroit • Monsanto Louisiana Continuous improvement Operating bonuses Base take or pa
Slide 25: Electronics: focused on margin improvement
Barclays 2 nd Annual industrial Select Conference • 2009 revenue of $1.6B • Significant opportunities – Semi industry recovery – Thin film PV – Eco-friendly solutions – Emerging markets • Goal of 15% operating margins in FY’11 Focused on margin improvement
Slide 26: Significant Opportunity in Thin-Film PV
Barclays 2 nd Annual industrial Select Conference Electronics Significant Opportunity in Thin-Film PV • Flat panel experience = differentiated advantage in thin film technologies • Comprehensive offerings and turnkey solutions through SunSource™ Solutions portfolio GW facility = $100 + MM in annual
Slide 27: Equity Affiliates Important Source of Growth
Barclays 2 nd Annual industrial Select Conference Equity Affiliates Important Source of Growth Mexico Italy India South Africa Thailand
Slide 28: FY'10 Full Year Outlook Update
Barclays 2 nd Annual industrial Select Conference FY’10 Full Year Outlook Update ● FY’10 overall… expecting a gradual and modest recovery ● WW manufacturing growth – Globally up 1% to 2% – US flat to up modestly – EU down 1% – Asia up 8% to 9% ● Silicon growth 20% to 25% ● Capex forecast unchanged –
Slide 29: The Air Products Opportunity
Barclays 2 nd Annual industrial Select Conference RESULTS • Double-digit EPS growth • ROCE 3-5% above cost of capital The Air Products Opportunity STABILITY • Long term contracts, consistent and predictable cash flow • Diversified across geographies and distribution channels • Airgas opportunity cre
Slide 30: Thank you
Thank you www.airproducts.com
Slide 31: Non GAAP Appendix - Year over Year Deltas
Barclays 2 nd Annual industrial Select Conference Non GAAP Appendix - Year over Year Deltas
Slide 32: Barclays 2 nd Annual industrial Select Conference
Barclays 2 nd Annual industrial Select Conference
Slide 33: Non GAAP Appendix - ROCE FY04 and FY08
Barclays 2 nd Annual industrial Select Conference Non GAAP Appendix - ROCE FY04 and FY08
Slide 34: Non GAAP Appendix - ROCE Tax Rate FY04 and FY08
Barclays 2 nd Annual industrial Select Conference Non GAAP Appendix - ROCE Tax Rate FY04 and FY08
Slide 35: Barclays 2 nd Annual industrial Select Conference
Barclays 2 nd Annual industrial Select Conference
Slide 36: Non GAAP Appendix - ROCE Tax Rate FY09 and Q1 FY10
Barclays 2 nd Annual industrial Select Conference Non GAAP Appendix - ROCE Tax Rate FY09 and Q1 FY10
Slide 37: Non-GAAP Appendix: FY10 Guidance
Barclays 2 nd Annual industrial Select Conference Non-GAAP Appendix: FY10 Guidance ($ Millions, except per share data) FY10 Guidance vs. FY09 Diluted EPS Continuing Ops FY09 GAAP $3.00 FY09 Global Cost Reduction Plan $0.94 FY09 Pension Settlement $0.02 FY09 Customer Bankruptcy and Asset Actions $0.1
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