Air Products And Chemicals, Inc. · NYSE:APD

Air Products And Chemicals — Q4 FY2006 Earnings Presentation

24 slides from Air Products And Chemicals's earnings presentation, Oct 25, 2006

  1. Slide 1: APD Earnings Teleconference Fiscal Fourth Quarter

    APD Earnings Teleconference Fiscal Fourth Quarter October 25, 2006

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this pres

  3. Slide 3: Fiscal Year 2006: Third Year of Double-Digit Growth

    Fiscal Year 2006: Third Year of Double-Digit Growth Continuing Operations * Growth vs. PY ($Millions) FY05 FY06 $∆ %∆ Sales $7,768 $8,850 $1,082 14% Operating Income 948 1,133 185 20% Net Income 678 795 117 17% EPS ($/share) 2.93 3.50 0.57 19% ORONA (%) 10.0% 11.3% 130bp z$500 million share repurcha

  4. Slide 4: FY 2006 Q4 Items: Amines Sale, Reorganization Charge and Accounting Change Impact

    FY 2006 Q4 Items Amines Sale, Reorganization Charge and Accounting Change Impact Operating Net ($Millions, except per share amounts) Income Income EPS Q4 FY06 GAAP $232.9 $128.4 $0.57 Add back Loss from discontinued ops -- 28.9 0.13 FY06 Global Cost Reduction 72.1 46.8 0.21 Accounting change -- 6.2

  5. Slide 5: Consolidated Q4 Financials: Strong Volumes Drive Results

    Consolidated Q4 Financials: Strong Volumes Drive Results Continuing Operations * Fav/(Unfav) vs. ($Millions) Q4 FY06* Q4 FY05* Q3 FY06 Sales $2,359 18% 5% SG&A as a % of Sales 11.8% 150bp 70bp Operating Income $305 25% 4% Net Income $210 19% 2% Diluted EPS $0.94 22% 4% ORONA 11.3% 130bp 40bp 5 * Com

  6. Slide 6: EPS Comparison: EPS up 22%

    EPS Comparison EPS up 22%* Q4FY06 Q4FY05 Change Diluted EPS* $0.94 $0.77 $0.17 Volume $0.26 Price/raw materials - Cost (0.11) PY hurricane disruptions 0.05 CY hurricane insurance gains 0.04 Homecare inventory adjustment (0.05) Interest expense (0.04) Currency 0.02 All other, net - Change $0.17 6 * C

  7. Slide 7: Merchant Gases: Strong Demand Continues

    Merchant Gases: Strong Demand Continues Fav/(Unfav) vs. Q4 FY06 Q4 FY05* Q3 FY06 Sales $722 17% 3% - Volume 10% 2% - Price 4% - - Currency 3% 1% Operating Income $128 41% 6% Operating Margin 17.8% 310bp 50bp z Strong North America pricing 7 * Comparisons v. PY are non-GAAP, see appendix for reconcil

  8. Slide 8: Merchant Gases: Volume Growth in All Regions

    Merchant Gases: Volume Growth in All Regions Fav/(Unfav) vs. Q4 FY05 Q3 FY06 Liquid/Bulk Volumes z North America 6% 3% z Europe 5% 1% z Asia 17% (2%) LOX/LIN Price z North America 12% 1% z Europe 2% (2%) z Asia 1% 1% Europe Cylinder Volumes -% (4%) 8

  9. Slide 9: Tonnage Gases: New Investments Drive Growth

    Tonnage Gases: New Investments Drive Growth Fav/(Unfav) vs. Q4 FY06 Q4 FY05* Q3 FY06 Sales $614 34% 12% - Volume 40% 14% - Natural gas (6%) (2%) Operating Income $104 71% 22% Operating Margin 16.9% 360bp 130bp z 6 new hydrogen plants in FY06 z Strong base business performance 9 * Comparisons v. PY a

  10. Slide 10: Electronics & Performance Materials: Demand Drives Volumes and Wins

    Electronics & Performance Materials: Demand Drives Volumes and Wins Fav/(Unfav) vs. Q4 FY06* Q4 FY05 Q3 FY06 Sales $522 20% 7% - Volume 18% 7% - Price (2%) - - Acquisitions/Divestitures 4% - Operating Income $61 57% 25% Operating Margin 11.7% 280bp 170bp z Electronics sales 16% 10% z Performance Mat

  11. Slide 11: Equipment & Energy: LNG and ASU Growth Continues

    Equipment & Energy: LNG and ASU Growth Continues Fav/(Unfav) vs. Q4 FY06 Q4 FY05* Q3 FY06 Sales $130 30% (6%) Operating Income $20 21% 32% Sales Backlog $446 (23%) (12%) z LNG exchangers — 10 under construction z Backlog quality remains strong 11 * Comparisons v. PY are non-GAAP, see appendix for re

  12. Slide 12: Healthcare: Focused on Improvements

    Healthcare: Focused on Improvements Fav/(Unfav) vs. Q4 FY06 Q4 FY05* Q3 FY06 Sales $150 11% 1% - Volume 7% 1% - Price -% - - Acquisitions 2% - - Currency 2% - Operating Income ($17) Operating Margin (11.0%) z US –Turnaround plans in place z Europe – Strong Growth 12 * Comparisons v. PY are non-GAAP,

  13. Slide 13: Chemicals: Polymers and PUI

    Chemicals: Polymers and PUI Fav/(Unfav) vs. Q4 FY06 Q4 FY05* Q3 FY06 Sales $222 (11%) -% – Volumes (11%) 2% – Price - (1%) – Nat’l gas/RM pass through 2% 1% – Divestitures (3%) (2%) – Currency 1% - Operating Income $15 (55%) (1%) Operating Margin 6.7% (660bp) (10bp) z Lower PUI volumes due to custom

  14. Slide 14: FY07 Full-Year Outlook

    FY07 Full-Year Outlook z EPS ~$3.84 to $4.00, 10%-14% growth – WW manufacturing growth slows in FY07 – Silicon growth ~5%, TFT-LCD ~40% – Improved Healthcare results – Productivity a key driver – Tax rate ~27% – Excludes any Chemicals repositioning gains or losses z PP&E capex forecast ~$1 billion 1

  15. Slide 15: FQ1 '07 Financial Outlook

    FQ1 ’07 Financial Outlook FQ4 2006 EPS (non GAAP) $0.94 z PQ hurricane settlements z Seasonality/maintenance/outages EPS z Lower Equipment & Energy results z Tonnage Gases & Asia volume growth z Healthcare improvement EPS FQ1 2007 EPS $0.90 - $0.95 15

  16. Slide 16: Our Commitment: Deliver Again in FY07

    Our Commitment: Deliver Again in FY07 z Improve earnings – Continue to load plants – Drive productivity z Increase return on capital… 12.5% ORONA z Maintain strong balance sheet 16

  17. Slide 17: tell me more

    tell me more www.airproducts.com

  18. Slide 18: thank you

    thank you

  19. Slide 19: Appendix: Q4 Sales Analysis

    Appendix: Q4 Sales Analysis Change versus Q4 FY05 Q3 FY06 Total Consolidated 18% 5% Comprised of: z Base business growth 17% 5% Volume 17% 5% Price - - z Acquisitions 1% - z Natural gas/RM pass thru (1%) - z Currency 1% - 19

  20. Slide 20: Prior Year Non-GAAP Reconciliation Total Company

    Appendix: Prior Year Non-GAAP Reconciliation Total Company ($ Millions, except per share data) GAAP Measure Proforma adjusts Non Gaap Measure % % FY05 FY06 Change FY05 Q4 (2) FY06 Q4 (1) FY05 FY06 Change Sales 7,768.3 8,850.4 14% 7,768.3 8,850.4 14% SG&A 1,013.6 1,080.7 7% 38.5 1,052.1 1,080.7 3% SG

  21. Slide 21: Prior Year Non-GAAP Reconciliation

    Appendix: Prior Year Non-GAAP Reconciliation ($ Millions, except per share data) Proforma GAAP Measure Adjustments Non Gaap Measure % % FY06 Q4 FY05 Q4 Change FY05 Q4 (1) FY06 Q4 FY05 Q4 Change Sales Merchant Gases 722.0 617.4 17% 722.0 617.4 17% Tonnage Gases 613.6 457.1 34% 613.6 457.1 34% Electro

  22. Slide 22: EPS Non-GAAP Reconciliation

    Appendix: EPS Non-GAAP Reconciliation % Change % FY06 Q4 Pro forma FY06 Non-GAAP Fiscal Year FY'07 FY'06 Change Adjustment(1) Pro forma Measure Diluted EPS - Continuing Ops $3.84-$4.00 $3.29 17%-22% $0.21 $3.50 10%-14% (1) Global Cost Reduction Plan 22

  23. Slide 23: ORONA Reconciliation to GAAP Measures

    Appendix: ORONA Reconciliation to GAAP Measures $ Millions Quarter Ended Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Operating Income 237.7 242.2 257.6 258.0 253.5 282.6 291.9 232.9 Proforma Option Expense (11.0) (10.9) (11.1) (14.9) Global Cost Reduction Plan 72.1 Op Inc ex Globa

  24. Slide 24: Hurricane/Insurance Detail

    Appendix: Hurricane/Insurance Detail Continuing Operations Q4 Q1 Q2 Q3 Q4 ($ million) FY05 * FY06 FY06 FY06 FY06 Insurance Recoveries 13 12 24 18 19 Property Damage (13) (5) (4) (9) (4) Business interruption (17) (28) (5) (5) (1) Total Impact (17) (20) 15 5 14 24

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