Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Citi Basic Materials Symposium 2010
33 slides from Air Products And Chemicals's conference presentation, Nov 30, 2010
Slide 1: Investor Update
Investor Update Paul Huck Senior Vice President and Chief Financial Officer Citi Basic Materials Symposium New York November 30, 2010
Slide 2: Forward Looking Statement
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 growth opportunities, new projects, applica
Slide 3: Additional Information
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 already owned by Air
Slide 4: Air Products At a Glance
Air Products At a Glance Business Segment Sales Geographic Sales 33% 22% 39% 5% 41% 21% 32% 7% Tonnage United States Merchant Canada/Latin America Electronics & Performance Materials Europe Asia Equipment & Energy • $9B company • Diverse markets and geographies • Positioned for continued long-term v
Slide 5: Air Products Value Proposition
Air Products Value Proposition Profitable Growth • Stability - Long term contracts - Consistent and predictable cash flows - Strong balance sheet • Growth - Energy opportunities - Environmental solutions - Emerging markets • Improving returns - Margin improvement - Productivity - Increasing dividend
Slide 6: Air Products Supply Modes
Air Products Supply Modes Stability and Growth Onsite/Pipeline Package Gases & Specialty Materials 27% 40% 12% 21% 15-20 year Contracts Short-Term Contracts Limited Volume Risk Differentiated Positions Energy Pass through Onsite/Pipeline Liquid/Bulk Equipment & Packaged Gases & Services Specialty Ma
Slide 7: Financial Performance
Financial Performance 17% 15% 13% 11% Op Margin ROCE 9% FY04 FY08 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 7 non-GAAP, see appendix for reconciliation
Slide 8: FY 2010 Summary
FY 2010 Summary Change vs. PY ($billions, continuing ops., ex. items) FY10 FY09 $∆ %∆ Sales $9.0 $8.3 $0.8 9% - Underlying 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% ROCE 12.4% 10.6% 180bp • Str
Slide 9: Integrated Industrial Gas Model
Integrated Industrial Gas Model Supply Chain Market Global Leverage Tonnage/ Opportunity Scale Onsites • Co-product • New segments • Innovation economics − PG only • Productivity • Liquid − Bundled and best back-up • Sales practices Liquid/ − Greater • Enterprise Bulk • Density presence systems & •
Slide 10: Integrated Model in China
Integrated Model in China Weihe PCEC • Onsite O2 & N2 • Largest Onsite • Liquid integration • Liquid integration Xingtai Steel • Existing Asset Purchase Beijing • New 1,700 TPD ASU • Liquid integration Xi’an Chengdu Shanghai PetroChina Guangzhou • First outsourced H2 for China Sanan Optoelectronics
Slide 11: Air Products: #1 Global H2 Position in high growth market
Air Products: #1 Global H2 Position in high growth market • Maintained 40+% share over 20 years (2 x closest competitor) • Significant Global Pipeline Networks • Highly probable Market Growth Drivers On-stream Sept 2020 Increased On-stream Heavy Transportation On-stream Sept 2010 Crude Fuels Sept 20
Slide 12: USGC H2 Pipeline Networks - 2010 / 2012
Air Products (Texas-Louisiana) USGC H2 Pipeline Networks - 2010 / 2012 TEXAS • > 1billion SCFD ExxonMobil LOUISIANA Baton Rouge of capacity ExxonMobil Motiva Marathon Beaumont • > 20 plants ExxonMobil Geismar Luling-2012 Lake Charles • > 600 miles of Motiva, ConocoPhillips, Valero pipeline driving:
Slide 13: Tonnage Gases
Tonnage Gases Significant New Markets for Oxygen • Steel New Market - Asian infrastructure growth Growth for - Mill modernization Oxygen • Gasification 15% - Power - Feedstock independence 40% - Low BTU hydrocarbons 45% • Cleaner coal - Power - CO2 capture Steel Gasification 200,000-300,000 tons-per
Slide 14: Merchant Gases
Merchant Gases Strong growth in Asia • Largest Liquid/Bulk Share in China among China Liquid global majors Share 2009 – Majors • Leading Merchant positions in Taiwan, Korea and Thailand • Leading Merchant Gases supplier in India • Generating growth through applications and product expertise Asia Mer
Slide 15: Applications Technology Driving Higher Growth
Applications Technology Driving Higher Growth Cleanfire® HRi™ burner Efficient oxygen plant design A winning combination! 15
Slide 16: Electronics
Electronics High Growth Markets • Solid growth in existing 150% LED and higher growth in new PV markets 100% TFT-LCD - IC silicon (MSI) = 8% Silicon (MSI) - TFT-LCD = 12% 50% - PV = 25% - LED = 30% 0% • Majority market share 2010 2011 2012 2013 positions with industry leaders - #1 in IC, TFT-LCD and
Slide 17: Performance Materials
Performance Materials Earth-Friendly Solutions Replacing Toxic Higher Efficiency Renewable or Emitting Insulation Content Materials Materials • Water-based • Reduced energy • Natural-based construction consumption surfactants for materials • Lower carbon I&I cleaning • Low emission footprint • Enabl
Slide 18: Equipment and Energy
Equipment and Energy Positioned for continued growth • ~$0.5 billion in FY’10 sales • Products - LNG heat exchangers, large air separation units, hydrocarbon separators, helium containers, hydrogen fueling systems • Strategy - Leverage existing relationships - Develop energy projects - Leverage engi
Slide 19: Sustainability at Air Products
Sustainability at Air Products Environmental Social Business Value Stewardship Responsibility Governance Providing Responsibly Improving Working with innovative managing the quality of integrity and solutions for our footprint life for our accountability the world’s through employees for our most pr
Slide 20: Macro Sustainability Trends Drive Growth
Macro Sustainability Trends Drive Growth Hydrogen Large-scale O2 Electronic Clean Water Energy Materials • Leading • Clean / efficient • Semiconduct • Wastewater, refinery H2 combustion or and TFT- drinking water supplier • Gasification LCD and water • Leader in H2 (IGCC, GTL, materials reuse fuelin
Slide 21: FY'11 Full Year Outlook
FY’11 Full Year Outlook • FY’11 overall… expecting a • FY’10 Adjusted Diluted EPS $5.02 continued, gradual, global - Merchant loading economic recovery - Tonnage new projects/loading - E&E similar to last year • WW manufacturing growth - E&PM loading - Global 3% - 4% - Pension headwind - US 3% - 4%
Slide 22: Capital Spending Outlook
Capital Spending Outlook FY11 Forecast $1.5B-$1.7B (excluding acquisitions) FY11 Growth CapEx FY11 Growth CapEx by Segment by Region 22% 16% 40% 66% 6% 12% 38% Merchant Americas Tonnage Asia Electronics & PM Europe Energy & Equip 22
Slide 23: The Air Products opportunity
The Air Products opportunity Stability Growth Results • Long term contracts, • Solid backlog and consistent and strong growth predictable cash flow opportunities in all • Double-digit EPS • Diversified across geographies growth markets, geographies • New growth • ROCE 3-5% above cost and distributio
Slide 24: Appendix Slides
Appendix Slides
Slide 25: Appendix: Q4 and Full Year FY10 Results
Appendix: Q4 and Full Year FY10 Results ($ 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% Operating Income 367.0 3
Slide 26: Non GAAP Appendix: ROCE FY04 and FY08
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 before tax as report
Slide 27: Non GAAP Appendix: ROCE Tax Rate FY04 and FY08
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, after Noncontroll
Slide 28: Non GAAP Appendix: FY04 and FY08 Operating Margin
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 Margin 13.6% 14.4%
Slide 29: Non GAAP Appendix: Operating Margin Trend
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% 15.1% 14.9% 15.6
Slide 30: Appendix: ROCE
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 Earnings before tax
Slide 31: Appendix: ROCE Tax Rate
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 from Cont. Ops. Befor
Slide 32: Appendix: FY11 Guidance
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 32
Slide 33: Thank you... tell me more
Thank you... tell me more AIR PRODUCTS ZZ
Air Products and Chemicals — Citi Basic Materials Symposium 2010 on 6ix