Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q4 2022 Earnings Presentation
32 slides from Air Products And Chemicals's earnings presentation, Nov 3, 2022
Slide 1: Create Shareholder Value
Moving forward Create Shareholder Value Q4 FY22 Earnings Conference Call November 3, 2022
Slide 2: Forward-looking statements; Non-GAAP financial measures
Moving forward Forward-looking statements 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, business outlook and investment opportunities. These forward-look
Slide 3: Safety Results
Moving forward Safety Results FY22 vs FY14 FY22 FY14 Employee Lost Time Injury Rate 0.24 0.09 63% better Employee Recordable Injury Rate 0.58 0.35 40% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: FY2022 Adjusted Earnings Per Share
Moving forward FY2022 Adjusted Earnings Per Share* In FY2022, Air Products delivered adjusted EPS* of $10.41, up 15% over prior year. 4 * Non-GAAP financial measure. See website for reconciliation.
Slide 5: Profitable Growth
Moving forward Profitable Growth This FY2022 performance confirms that Air Products continues to deliver near-term results while executing its long-term growth strategy 5
Slide 6: Adjusted EPS Growth
Moving forward Adjusted EPS* Growth Since 2014, Air Products’ goal has been to deliver average adjusted EPS* growth of 10% per year. In the last 8 years, we have delivered 11%. 6 * Non-GAAP financial measure. See website for reconciliation.
Slide 7: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward +9% to +12%(A) $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 +15% $7.50 +8% $7.00 +2% $6.50 $6.00 +10% +18% $5.50 +12% $5.00 +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Guidance * Non-GAAP financial measure. See website for
Slide 8: Adjusted EPS Growth
Moving forward Adjusted EPS* Growth For FY2023, our guidance is to continue this trend and deliver adjusted EPS* of $11.20 to $11.50. 8 * Non-GAAP financial measure. See website for reconciliation.
Slide 9: Dividend Growth
Moving forward Dividend Growth Air Products is committed to paying a healthy dividend to our shareholders. 9
Slide 10: Dividend History
Dividend History Moving forward 40 consecutive years of dividend increases $6.50 $6.00 $5.50 Dividend/Share* $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 • 8%, or $0.12 per share, dividend increase announced Feb 2022 (to $1.62 per share) • >$1.4B of dividend
Slide 11: Adjusted EBITDA Margin
Adjusted EBITDA Margin* Moving forward 44% 42.7% 41.9% 42% 40.1% 40.4% 40% 40.3% 40.3% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36% 34.8% 36.6% 34.9% 35.8% 35.7% 34.6% 33.9% 34.3% 34% 33.2% 34.8% 34.1% 33.9% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% Q214 Q3
Slide 12: Management Philosophy
Moving forward Management Philosophy • Our Goal – to be the safest, most diverse and most profitable industrial gas company in the world, providing excellent service to our customers • Creating Shareholder Value – cash is king; long-term increase in per share value of our stock; capital allocation i
Slide 13: New York Green Hydrogen Project
Moving forward New York Green Hydrogen Project Hydropower 94MW Water from St. Lawrence River H2fM LHY O2 + - H2 Gaseous Green Hydrogen Liquefaction Storage and Industrial Electrolysis 35 MTPD Distribution Decarbonization • ~$500M investment • 35MT of liquid hydrogen, start-up 2026/2027 • 94 MW of hy
Slide 14: World Energy Project
Moving forward World Energy Project Sustainable Aviation Fuel Expanded scope increases capital from $2 billion to $2.5 billion at our expected return 14
Slide 15: Fiscal Year Results
Moving forward Fiscal Year Results ($ million) FY21 FY22 Change Sales $10,323 $12,699 23% - Volume 8% - Price 6% - Energy cost pass-through 13% - Currency (4%) Adjusted EBITDA* $3,883 $4,247 9% - Adjusted EBITDA Margin* 37.6% 33.4% (420bp) Adjusted Operating Income* $2,268 $2,413 6% - Adjusted Opera
Slide 16: Full Year Adjusted EPS
Full Year Adjusted EPS* Moving forward Adjusted EPS* Up 15% vs. PY FY21 FY22 Change GAAP EPS from cont. ops $9.12 $10.08 Non-GAAP items (0.09) 0.32 Adjusted EPS* $9.02 $10.41 $1.39 Volume 0.80 Price, net of variable costs 0.81 Other cost (0.84) $0.77 Currency ($0.24) Equity affiliates’ income 0.74 T
Slide 17: Q4 Results
Q4 Results Moving forward Fav/(Unfav) vs. ($ million) Q4FY22 Q4FY21 Q3FY22 Sales $3,570 26% 12% - Volume 9% 8% - Price 8% 2% - Energy cost pass-through 15% 5% - Currency (6%) (3%) Adjusted EBITDA* $1,145 10% 6% - Adjusted EBITDA Margin* 32.1% (450bp) (180bp) Adjusted Operating Income* $700 14% 12% -
Slide 18: Q4 Adjusted EPS
Q4 Adjusted EPS* Moving forward Adjusted EPS* Up 15% vs. Prior Year Q4FY21 Q4FY22 Change GAAP EPS from cont. ops $2.51 $2.56 Non-GAAP items − 0.32 Adjusted EPS* $2.51 $2.89 $0.38 Volume 0.33 Price, net of variable costs 0.39 Other cost (0.26) $0.46 Currency ($0.15) Equity affiliates’ income 0.07 Oth
Slide 19: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) FY21 FY22 Change Adjusted EBITDA* $3,883 $4,247 $364 Interest, net* (68) (66) 2 Cash Tax (391) (429) (38) Maintenance CapEx* (774) (693) 81 Distributable Cash Flow* $2,650 $3,059 $409 $11.91/Share* $13.75/Share* Dividends (1,257) (1,383) (126) Investable Ca
Slide 20: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made, substantial investment capacity remaining Available Now (9/30/22) ($Billion) Total Debt Capacity $ 12.7 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 4.3 Debt ($7.6B) minus cash1 ($3.3B) Additional Available Now $ 8.4 Esti
Slide 21: Asia
Moving forward Asia Fav/(Unfav) vs. Q4FY22 Q4FY21 Q3FY22 Sales $860 14% 14% - Volume 16% 16% - Price 3% 1% - Energy cost pass-through 2% 1% - Currency (7%) (4%) Adjusted EBITDA* $373 13% 15% - Adjusted EBITDA Margin* 43.3% (50bp) 20bp Operating Income $263 28% 25% - Operating Margin 30.6% 330bp 260b
Slide 22: Europe Power Costs Up 5x – 6x
Europe Power Costs Moving forward Up 5x – 6x Europe Power Index (Jan21 = 100) 650 Q4 avg. 550 522 450 Q2 avg. 350 Q1 avg. Q3 avg. 327 318 301 250 Q4 avg. 173 150 Q3 avg. Q2 avg. 109 88 50 • Natural gas and power passed-through in onsite business • Merchant price increases recovered power cost increa
Slide 23: Europe
Moving forward Europe Fav/(Unfav) vs. Q4FY22 Q4FY21 Q3FY22 Sales $864 34% 17% - Volume -% 5% - Price 19% 5% - Energy cost pass-through 30% 12% - Currency (15%) (5%) Adjusted EBITDA* $217 8% 5% - Adjusted EBITDA Margin* 25.1% (600bp) (290bp) Operating Income $150 20% 9% - Operating Margin 17.4% (200b
Slide 24: Americas
Moving forward Americas Fav/(Unfav) vs. Q4FY22 Q4FY21 Q3FY22 Sales $1,542 38% 9% - Volume 12% 5% - Price 8% 1% - Energy cost pass-through 19% 4% - Currency (1%) (1%) Adjusted EBITDA* $515 8% 7% - Adjusted EBITDA Margin* 33.4% (930bp) (50bp) Operating Income $333 15% 11% - Operating Margin 21.6% (440
Slide 25: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q4FY22 Q4FY21 Q3FY22 Sales $42 $12 $6 Operating Income $5 ($7) ($2) Equity Affiliate Income $63 $41 ($4) Adjusted EBITDA* $75 $35 ($6) • Sales increased due to acquisitions • Op. Income lower due to favorable contract settlement in prior year • Jaza
Slide 26: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q4FY22 Q4FY21 Sales $263 ($35) Adjusted EBITDA* ($36) ($30) Operating Income ($51) ($35) • Full-year adjusted EBITDA* improved • Q4 sales and profit lower on reduced sale of equipment activity • Additional resources to support growth strategy • LNG
Slide 27: Outlook
Moving forward Outlook* Q1 FY23 FY23 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $2.60 to $2.80 +5% to +13% $11.20 to $11.50 +9% to +12% FY23 Capital Expenditures* $5.0 - $5.5 billion *Non-GAAP financial measure. 27 Fiscal year 2022 comparisons have been updated to reflect adjustment for
Slide 28: 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 28
Slide 29: Appendix slides
Appendix slides 29
Slide 30: Major Projects
Major Projects Moving forward Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) Liquid H2 LaPorte, TX ~30 tons per day Q1 FY22 Merchant ASU/Gasifier/ AP / ACWA / SA / APQ – Jazan, ~$12 billion total JV Q1 FY22 Gasif to Refinery Power Saudi Arabia – Phase I ASU/Liquid Eastm
Slide 31: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2023 $5.0 - $5.5 billion# a 2022 $4,650 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY22 $MM a Q1 $2,331 Q2 $819 Q3 $706 Q4 $795 a YTD $4,650 Capital expenditures are calculated independently for each quarter and may n
Slide 32: Thank you
Moving forward Thank you tell me more
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