Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q3 2022 Earnings Presentation
30 slides from Air Products And Chemicals's earnings presentation, Aug 4, 2022
Slide 1: Create Shareholder Value: Q3 FY22 Earnings Conference Call
Moving forward Create Shareholder Value Q3 FY22 Earnings Conference Call August 4, 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 Q3FY22 Q3FY22 vs FY14 YTD FY14 Employee Lost Time Injury Rate 0.24 0.10 58% better Employee Recordable Injury Rate 0.58 0.40 31% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: Air Products adjusted EPS
Moving forward Air Products adjusted EPS* $11.00 +13% to +15% $10.50 $10.00 $9.50 $9.00 $8.50 $8.00 $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 Guidance • Q3 FY22 adjusted EPS* of $2.62 up 13% vs. prior year 4 * Non-GA
Slide 5: 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 quarter dividend increase announced Feb 2022 (to $1.62 per quarter) • >$1.4B of divide
Slide 6: 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% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% Q214 Q314 Q41
Slide 7: Our Goal
Moving forward Our Goal Air Products will be the safest, most diverse and most profitable industrial gas company in the world, providing excellent service to our customers 7
Slide 8: 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 Capital allocation is the most important job of Focus the CEO. Opera
Slide 9: Five Point Plan: Moving Forward
Moving forward Five Point Plan: Moving Forward Sustain Deploy Evolve Change Belong the lead capital portfolio culture and Matter Safest, most Strategically invest Grow onsite 4S Inclusion diverse, and most significant available portion profitable capacity Best-in-class Win profitable Energy, Committ
Slide 10: Our Higher Purpose
Moving forward Our Higher Purpose Bringing people together to collaborate and innovate solutions to the world’s most significant energy and environmental sustainability challenges 10
Slide 11: New Sustainability Commitments
Moving forward New Sustainability Commitments: $15B in capex Engage on Climate benefits Third by ‘30 Net Zero for Energy Science-Based of zero- and Scope 3 goal by 2050 Transition Targets low- carbon H2 Sustainability in action 11
Slide 12: World-leading investment in real projects
Moving forward World-leading investment in real projects $15B to drive the energy transition An additional >$11B $4B already committed and being executed to to be allocated to come online before 2027 future projects by 2027 Alberta California Louisiana NEOM Future SAF Production Blue Hydrogen/ Net Z
Slide 13: Future climate benefits
Moving forward Future climate benefits Zero- & low-carbon H2 projects in execution If all the H2 from Air Products’ projects is used for the heavy-duty truck market: Expected future Equivalent to avoiding climate benefits of emissions from 500M+ = ~50B gallons diesel fuel tonnes of CO2e avoided over
Slide 14: Q3 Results
Q3 Results Moving forward Fav/(Unfav) vs. ($ million) Q3FY22 Q3FY21 Q2FY22 Sales $3,189 22% 8% - Volume 5% 4% - Price 7% 3% - Energy cost pass-through 15% 4% - Currency (5%) (3%) Adjusted EBITDA* $1,081 11% 6% - Adjusted EBITDA Margin* 33.9% (360bp) (70bp) Adjusted Operating Income* $627 9% 12% - Ad
Slide 15: Q3 Adjusted EPS
Q3 Adjusted EPS* Moving forward Adjusted EPS* Up 13% vs. Prior Year Q3FY21 Q3FY22 Change GAAP cont ops EPS $2.36 $2.62 Less: non-GAAP items (0.05) 0.00 Adjusted EPS* $2.31 $2.62 $0.31 Volume 0.11 Price (net of variable costs) 0.32 Other Cost (0.16) $0.27 Currency/FX ($0.08) Equity Affiliate Income 0
Slide 16: Cash flow focus
Moving forward Cash flow focus ($ million) Q3FY22 LTM Adjusted EBITDA* $4,144 Interest, net* (70) Cash Tax (440) Maintenance Capex* (721) Distributable Cash Flow* $2,913 $13.09/Share* Dividends (1,356) Investable Cash Flow* $1,557 • >$13/share of Distributable Cash Flow* • Paid over 45% of Distribut
Slide 17: FY18-27 Capital Deployment Scorecard
FY18-27 Capital Deployment Scorecard Moving forward Significant progress made, substantial investment capacity remaining Available Now (6/30/22) ($Billion) Total Debt Capacity $ 12.4 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 4.3 Debt ($7.6B) minus cash1 ($3.3B) Additional Available Now $ 8.2 Esti
Slide 18: Asia
Moving forward Asia Fav/(Unfav) vs. Q3FY22 Q3FY21 Q2FY22 Sales $751 -% -% - Volume 2% 2% - Price 2% 2% - Energy cost pass-through -% -% - Currency (4%) (4%) Adjusted EBITDA* $324 (5%) 1% - Adjusted EBITDA Margin* 43.1% (230bp) 30bp Operating Income $211 (4%) 3% - Operating Margin 28.0% (110bp) 90bp
Slide 19: Europe Power Costs Up 3x – 4x
Europe Power Costs Moving forward Up 3x – 4x Europe Power Index (Jan21 = 100) 450 400 Q2 avg. 350 327 Q3 avg. 302 300 250 200 150 100 50 • Natural gas and power passed-through in onsite business • Merchant price increases recovered power cost increase 19 Power based on published country day-ahead po
Slide 20: Europe
Moving forward Europe Fav/(Unfav) vs. Q3FY22 Q3FY21 Q2FY22 Sales $740 23% -% - Volume (3%) 2% - Price 17% 3% - Energy cost pass-through 24% 1% - Currency (15%) (6%) Adjusted EBITDA* $207 4% 9% - Adjusted EBITDA Margin* 28.0% (500bp) 230bp Operating Income $137 3% 18% - Operating Margin 18.6% (380bp)
Slide 21: Americas
Moving forward Americas Fav/(Unfav) vs. Q3FY22 Q3FY21 Q2FY22 Sales $1,416 33% 19% - Volume 4% 6% - Price 8% 4% - Energy cost pass-through 22% 9% - Currency (1%) -% Adjusted EBITDA* $481 3% 7% - Adjusted EBITDA Margin* 33.9% (980bp) (400bp) Operating Income $299 5% 8% - Operating Margin 21.1% (580bp)
Slide 22: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q3FY22 Q3FY21 Q2FY22 Sales $35 $12 $7 Operating Income $7 $1 $2 Equity Affiliate Income $67 $50 ($4) Adjusted EBITDA* $81 $52 ($2) • Sales increased due to acquisitions • Jazan joint venture delivering as expected – EAI higher versus prior year – Re
Slide 23: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q3FY22 Q3FY21 Sales $247 $80 Adjusted EBITDA* ($12) $46 Operating Income ($26) $42 • Sales and profit higher on increased sale of equipment activity and LNG project completion • LNG inquiries increasing 23 * Non-GAAP financial measure. See website f
Slide 24: Outlook
Moving forward Outlook* Q4 FY22 FY22 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $2.68 to $2.88 +7% to +15% $10.20 to $10.40 +13% to +15% FY22 Capital Expenditures* over $4.5 billion 24 * Non-GAAP financial measure. See website for reconciliation.
Slide 25: 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 25
Slide 26: Appendix slides
Appendix slides 26
Slide 27: Major Projects
Major Projects Moving forward Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) ASU/H2 Samsung Giheung, Korea World Scale Q2 FY21 Electronics ASU/Liquid Big River Steel, Arkansas >250 TPD + liquid Q3 FY21 Steel/Merchant Liquid H2 LaPorte, TX ~30 tons per day Q1 FY22 Mercha
Slide 28: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q1 $1.79 $1.86 $2.14 $2.12 $2.52 Q2 $1.71 $1.92 $2.04 $2.08 $2.38 Q3 $1.95 $2.17 $2.01 $2.31 $2.62 Q4 $2.00 $2.27 $2.19 $2.51 $2.68 - $2.88# $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $8.38 $9.02 $10.20 - $10.40# $11.00
Slide 29: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2022 >$4.5 billion# 2021 $2,551 2020 $2,717 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 FY22 $MM Q1 $2,331a Q2 $819 Q3 $706 Q4 a YTD $3,855 Capital expenditures are calculated independently for each quarter and may not sum to full year amount
Slide 30: Thank you
Moving forward Thank you tell me more
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