Air Products And Chemicals, Inc. · NYSE:APD

Air Products And Chemicals — Q4 2010 Earnings Presentation

28 slides from Air Products And Chemicals's earnings presentation, Oct 21, 2010

  1. Slide 1: Q4 FY'10 Earnings Conference Call

    Q4 FY’10 Earnings Conference Call October 21, 2010

  2. Slide 2: Forward Looking Statement

    Q4 FY’10 Earnings Forward Looking Statement This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including earnings guidance; projections; targets; plans and expectations regarding new projects, application

  3. Slide 3: Additional Information

    Q4 FY’10 Earnings ADDITIONAL INFORMATION On February 11, 2010, Air Products Distribution, Inc. (“Purchaser”), 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, Inc. (“Airgas”) not al

  4. Slide 4: Financial Performance

    Q4 FY’10 Earnings Financial Performance* 4 4 * non-GAAP, see appendix for reconciliation

  5. Slide 5: FY 2010 Summary

    Q4 FY’10 Earnings FY 2010 Summary Change vs. PY* ($billions, continuing ops., ex. items) FY10 FY09 $∆ %∆ Sales $9.0 $8.3 $0.8 9% - Underlying business 8% - Energy/RM pass thru -% - Currency 1% Operating Income $1.5 $1.2 $0.3 25% Operating Margin 16.5% 14.3% 220bp EPS ($/share) 5.02 4.06 0.96 24% ROC

  6. Slide 6: Q4 Financials

    Q4 FY’10 Earnings Q4 Financials Fav/(Unfav) vs. ($millions, Continuing Ops ex. items) Q4 FY10 Q4 FY09 Q3 FY10 Sales $2,351 10% 4% - Volume 8% 3% - Price -% -% - Energy/RM pass-thru 4% .5% - Currency (2%) .5% Operating Income $402 22% 7% Operating Margin 17.1% 170bp 50bp Net Income $294 19% 6% Dilute

  7. Slide 7: Q4 EPS Analysis

    Q4 FY’10 Earnings Q4 EPS Analysis Q4 FY10 Q4 FY09 Change As-reported diluted EPS $1.25 $1.13 - discontinued ops inc - (0.01) - acquisition-related exp (0.10) - Adjusted cont ops EPS $1.35 $1.14 $0.21 Volume $0.28 Price / raw materials (0.06) $0.26 Cost 0.04 Currency/FX (0.01) Equity Affiliates/Non-c

  8. Slide 8: Merchant Gases

    Q4 FY’10 Earnings Merchant Gases Fav/(Unfav) vs. Q4 FY10 Q4 FY09 Q3 FY10 Sales $948 2% 4% - Volume 5% 3% - Price -% -% - Currency (3%) 1% Operating Income $185 12% 5% Operating Margin 19.5% 170bp 20bp  Higher volumes across all regions led by Asia  Prices flat 8

  9. Slide 9: Merchant Gases: Q4 Sales Analysis vs PY

    Q4 FY’10 Earnings Merchant Gases: Q4 Sales Analysis vs PY North America Europe Asia Sales % change 5% (8%) 17% - Volume 5% 1% 11% - Price -% (1%) 3% - Currency - (8%) 3%  North America broad volume growth, LOX/LIN pricing up, offset by lower pass-through on LHY  Europe liquid bulk volume growth pa

  10. Slide 10: Tonnage Gases

    Q4 FY’10 Earnings Tonnage Gases Fav/(Unfav) vs. Q4 FY10 Q4 FY09 Q3FY10 Sales $752 17% 4% - Volume 4% 2% - Energy/RM pass thru 14% 2% - Currency (1%) -% Operating Income $117 11% (2%) Operating Margin 15.6% (80bp) (90bp)  Volumes higher on new plants on-stream  Margins lower due mainly to the impac

  11. Slide 11: Electronics & Performance Materials

    Q4 FY’10 Earnings Electronics & Performance Materials Fav/(Unfav) vs. Q4 FY10 Q4 FY09 Q3 FY10 Sales $523 20% 5% - Volume 21% 6% - Price (1%) (1%) - Currency -% -% Operating Income $84 71% 35% Operating Margin 16.1% 480bp 350bp  Electronics sales 25% 9%  Performance Materials sales 15% 1% 11

  12. Slide 12: Equipment & Energy

    Q4 FY’10 Earnings Equipment & Energy Fav/(Unfav) vs. Q4 FY10 Q4 FY09 Q3 FY10 Sales $128 5% 11% Operating Income $20 248% (4%) Sales Backlog $274 15% (9%)  Increased LNG activity  Favorable project performance 12

  13. Slide 13: FY'11 Full Year Outlook

    Q4 FY’10 Earnings FY’11 Full Year Outlook ● FY’11 overall… expecting a  FY’10 Adjusted Diluted EPS $5.02 continued, gradual, global economic recovery – Merchant loading – Tonnage new projects/loading ● WW manufacturing growth – E&E similar to last year – Global 3% - 4% – E&PM loading – US 3% - 4% –

  14. Slide 14: FQ1 2011 Outlook

    Q4 FY’10 Earnings FQ1 2011 Outlook } FQ4 2010 EPS $1.35  New plants on-stream  Improving economy EPS  Favorable currency  Seasonality  Outage costs/lower volumes  Higher pension expense } EPS FQ1 2011 EPS $1.31-$1.35 Comparison is non-GAAP, excludes acquisition-related costs 14

  15. Slide 15: Capital Spending Outlook

    Q4 FY’10 Earnings Capital Spending Outlook FY11 Growth CapEx by Segment 12% 6% 16% FY11 Forecast Merchant Tonnage $1.5B-$1.7B 66% Electronics & PM (excluding acquisitions) Energy & Equip FY11 Growth CapEx by Region 38% 40% Americas 22% Europe Asia 15

  16. Slide 16: Airgas Update

    Q4 FY’10 Earnings Airgas Update  October 15th, 2009 – Air Products ready to negotiate with Airgas to conclude a transaction  September 15th, 2010 – Shareholders approve all three proxy proposals – Shareholders vote for new independent Board members  September 20th, 2010 – Airgas files suit  Octo

  17. Slide 17: Appendix Slides

    Q4 FY’10 Earnings Appendix Slides Q4 FY’10 Earnings

  18. Slide 18: Appendix: FY2010 Sales Analysis

    Q4 FY’10 Earnings Appendix: FY2010 Sales Analysis Change versus FY2009 Total Consolidated 9% Comprised of:  Base business growth 8% – Volume 9% – Price (1%)  Energy/RM pass thru -%  Currency 1% 18

  19. Slide 19: Appendix: Q4 Sales Analysis

    Q4 FY’10 Earnings Appendix: Q4 Sales Analysis Change versus Q4 FY09 Q3 FY10 Total Consolidated 10% 4% Comprised of:  Base business growth 8% 3% – Volume 8% 3% – Price -% -%  Energy/RM pass thru 4% .5%  Currency (2%) .5% 19

  20. Slide 20: Appendix: Q4 and Full Year FY10 Results

    Q4 FY’10 Earnings Appendix: Q4 and Full Year FY10 Results ($ Millions, except per share data) Non GAAP GAAP Measure Adjustments Non GAAP Measure $ % $ % Q410 vs. Q409 - Total Co. Q410 Q409 Change Change Q410 (1) Q410 Q409 Change Change Sales 2,351.2 2,129.3 221.9 10% 2,351.2 2,129.3 221.9 10% Operat

  21. Slide 21: Non GAAP Appendix: ROCE FY04 and FY08

    Q4 FY’10 Earnings Non GAAP Appendix: ROCE FY04 and FY08 $ Millions FY04 FY08 Quarter Ended Q403 Q104 Q204 Q304 Q404 Q407 Q108 Q208 Q308 Q408 Numerator Operating Income Reported 181.7 200.2 231.3 223.7 380.4 348.6 393.7 373.1 Equity Affiliate Income 17.8 19.2 19.8 21.8 25.3 42.4 46.5 30.8 Earnings be

  22. Slide 22: Non GAAP Appendix: ROCE Tax Rate FY04 and FY08

    Q4 FY’10 Earnings Non GAAP Appendix: ROCE Tax Rate FY04 and FY08 Q104 Q204 Q304 Q404 Q108 Q208 Q308 Q408 Reported Income from Cont. Ops. Bef. Tax 169.0 187.6 221.8 217.6 364.9 352.1 400.7 361.1 Noncontrolling Interest (1.9) (4.1) (3.3) (2.5) (6.1) (4.5) (7.6) (4.8) Income from Cont. Ops. Before Tax,

  23. Slide 23: Non GAAP Appendix: FY04 and FY08 Operating Margin

    Q4 FY’10 Earnings Non GAAP Appendix: FY04 and FY08 Operating Margin ($ Millions) GAAP Measure Non GAAP Ajusts. Non GAAP Measure FY04 and FY08 - Total Co. FY04 FY08 FY04 (1) FY08 (2) FY04 FY08 Sales 6,163.2 10,414.5 6,163.2 10,414.5 Operating Income 836.9 1,495.8 (49.0) 26.3 787.9 1,522.1 Operating M

  24. Slide 24: Non GAAP Appendix: Operating Margin Trend

    Q4 FY’10 Earnings Non GAAP Appendix: Operating Margin Trend ($millions) Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Sales 2,195.3 1,955.4 1,976.2 2,129.3 2,173.5 2,249.0 2,252.3 2,351.2 GAAP Operating Income 114.1 260.4 143.8 328.0 345.0 340.6 336.4 367.0 GAAP Operating Margin 5.2% 13.3% 7.3% 15.4% 15.9

  25. Slide 25: Appendix: ROCE

    Q4 FY’10 Earnings Appendix: ROCE $ Millions Quarter Ended Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Numerator Operating Income Reported 348.6 393.7 373.1 114.1 260.4 143.8 328.0 345.0 340.6 336.4 367.0 Equity Affiliate Income 42.4 46.5 30.8 24.5 27.0 28.5 32.2 26.9 32.2 32.5 35.3 E

  26. Slide 26: Appendix: ROCE Tax Rate

    Q4 FY’10 Earnings Appendix: ROCE Tax Rate Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Reported Income from Cont. Ops. Bef. Tax 352.1 400.7 361.1 102.1 257.4 144.8 332.3 340.3 343.3 338.9 371.5 Noncontrolling Interest (4.5) (7.6) (4.8) (5.0) (1.6) (4.8) - (5.0) (6.4) (8.1) (5.9) Income fro

  27. Slide 27: Appendix: FY11 Guidance

    Q4 FY’10 Earnings Appendix: FY11 Guidance Diluted EPS Continuing Ops FY10 GAAP $4.74 FY10 Acquisition - Related Costs $0.28 FY10 Non GAAP $5.02 FY11 Guidance (1) $5.50-$5.70 % Change GAAP 16%-20% % Change Non GAAP 10%-14% (1) Excludes acquisition - related costs 27

  28. Slide 28: Thank you

    Thank you www.airproducts.com

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