Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q1 2024 Earnings Presentation
23 slides from Air Products And Chemicals's earnings presentation, Feb 5, 2024
Slide 1: Creating Shareholder Value: Q1 FY24 Earnings Conference Call
Moving forward Creating Shareholder Value Q1 FY24 Earnings Conference Call February 5, 2024
Slide 2: Forward-looking statements and 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 Q1FY24 vs FY14 Q1FY24 FY14 Employee Lost Time Injury Rate 0.24 0.01 96% better Employee Recordable Injury Rate 0.58 0.13 78% better FY14 includes former Materials Technologies businesses divested in FY2017 3
Slide 4: 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 is
Slide 5: Q1 Adjusted EPS $2.82, Up 7% vs. Prior Year
Moving forward Q1 Adjusted EPS* $2.82, Up 7% vs. Prior Year Positive contributors for the Results diverged from guidance quarter vs. prior year: range due to: • Strong conversion margins • Asia weakness (particularly China) • Robust onsite in Americas and • Helium volume shortfall Europe • Cost head
Slide 6: Outlook
Moving forward Outlook* Q2 FY24 FY24 Adjusted EPS* vs Prior Year Adjusted EPS* vs Prior Year $2.60 to $2.75 -5% to -% $12.20 to $12.50 +6% to +9% Expect FY24 capital expenditures* of $5 billion - $5.5 billion Revised FY24 adjusted EPS guidance primarily driven by: • Weaker Q1 results • Continued sof
Slide 7: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward Deliver double-digit, long-term EPS growth $13.50 $13.00 +6% to 9%(A) $12.50 $12.00 $11.50 $11.00 $10.50 $10.00 $9.50 $9.00 12% $8.50 +17% $8.00 $7.50 +8% $7.00 +2% $6.50 $6.00 +10% +18% $5.50 $5.00 +12% +16% $4.50 +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY
Slide 8: Dividend History
Dividend History Moving forward 40+ consecutive years of dividend increases $7.50 $7.00 $6.50 $6.00 Dividend/Share* $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 • Increased dividend to $1.77 per share, announced in January 2024 • ~$1.6 billio
Slide 9: Adjusted EBITDA Margin
Moving forward Adjusted EBITDA Margin* 44% 42.7% 41.9% 42% 40.1% 40.4% 39.8% 39.5% 40% 40.3% 40.3% 39.2% 39.2% 37.7% 38% 37.5% 36.3% 35.9% 35.2% 37.3% 36.0% 36% 34.8% 34.9% 36.6% 35.8% 35.7% 34.6% 33.9% 34.1% 34.3% 33.9% 34% 33.2% 34.8% 34.1% 33.2% 33.5% 32% 31.1% 32.9% 32.1% 29.6% 30% 28.7% 28% 28.
Slide 10: Q1 Results
Q1 Results Moving forward Fav/(Unfav) vs. ($ million) Q1FY24 Q1FY23 Q4FY23 Sales $2,997 (6%) (6%) - Volume 3% (5%) - Price 1% 1% - Energy cost pass-through (11%) (1%) - Currency 1% (1%) Adjusted EBITDA* $1,175 8% (7%) - Adjusted EBITDA Margin* 39.2% 510bp (30bp) Adjusted Operating Income* $667 2% (1
Slide 11: Q1 Adjusted EPS
Q1 Adjusted EPS* Moving forward Q1FY23 Q1FY24 Change GAAP EPS from cont. ops $2.57 $2.73 Non-GAAP items 0.07 0.08 Adjusted EPS* $2.64 $2.82 $0.18 Volume 0.11 Price, net of variable costs 0.15 Other cost (0.21) $0.05 Currency $0.00 Equity affiliates’ income 0.18 Tax rate 0.03 Interest expense (0.05)
Slide 12: Americas
Moving forward Americas Fav/(Unfav) vs. Q1FY24 Q1FY23 Q4FY23 Sales $1,252 (10%) (7%) - Volume 3% (5%) - Price 2% 1% - Energy cost pass-through (15%) (3%) - Currency -% -% Adjusted EBITDA* $561 9% (7%) - Adjusted EBITDA Margin* 44.8% 760bp 30bp Operating Income $354 3% (11%) - Operating Margin 28.3%
Slide 13: Asia
Moving forward Asia Fav/(Unfav) vs. Q1FY24 Q1FY23 Q4FY23 Sales $794 2% (1%) - Volume -% (1%) - Price 1% -% - Energy cost pass-through 2% -% - Currency (1%) -% Adjusted EBITDA* $327 (5%) 3% - Adjusted EBITDA Margin* 41.2% (320bp) 160bp Operating Income $211 (10%) 7% - Operating Margin 26.6% (370bp) 2
Slide 14: Europe
Moving forward Europe Fav/(Unfav) vs. Q1FY24 Q1FY23 Q4FY23 Sales $731 (8%) 3% - Volume 9% 2% - Price (2%) 1% - Energy cost pass-through (20%) 1% - Currency 5% (1%) Adjusted EBITDA* $267 28% 7% - Adjusted EBITDA Margin* 36.4% 1,020bp 130bp Operating Income $198 36% 17% - Operating Margin 27.0% 860bp
Slide 15: Middle East & India
Moving forward Middle East & India Fav/(Unfav) vs. Q1FY24 Q1FY23 Sales $35 ($6) Operating Income $4 ($3) Equity Affiliates’ Income $93 $29 Adjusted EBITDA* $103 $26 • Sales and operating income decreased due to lower volume • Jazan Project Phase II, completed in January 2023, added to equity affilia
Slide 16: Corporate and Other
Moving forward Corporate and Other Fav/(Unfav) vs. Q1FY24 Q1FY23 Sales $185 $6 Adjusted EBITDA* ($84) ($22) Operating Income ($100) ($21) • Sale of Equipment project added costs 16 * Non-GAAP financial measure. See website for reconciliation.
Slide 17: Our Competitive Advantage
Moving forward Our Competitive Advantage The only sustainable element of long-term competitive advantage is the degree of commitment and motivation of the people in the enterprise 17
Slide 18: Appendix slides
Appendix slides 18
Slide 19: Major Project Commitments
Major Project Commitments Moving forward Expect strong pipeline of growth projects to extend leadership position in low- and zero-carbon hydrogen Plant Customer/Location Supply Mode/Off-take Key Investment Recently Onstream Attributes ASU/Gasifier/Power Aramco/Jazan, Saudi Arabia On-site/Long Term •
Slide 20: Cash Flow Focus
Cash Flow Focus Moving forward Supports dividend and capital deployment ($ million) Q1FY24 LTM Adjusted EBITDA* $4,793 Interest, net* (243) Cash Tax (647) Maintenance Capex* (680) Distributable Cash Flow* $3,223 $14.46/Share* Dividends (1,526) Investable Cash Flow* $1,697 • ~$14.50/share of distribu
Slide 21: FY24-33 Capital Deployment
Moving forward FY24-33 Capital Deployment Significant investment capacity & backlog to support growth 10-Year Capital Deployment Outlook Assumes 3.0x LTM Adjusted EBITDA* less net debt* as of Current Additional Debt Capacity $ 6.0 Q1 FY24 Future Investable Cash Flow*1 17.0 Cumulative Investable Cash
Slide 22: Capital Expenditures
Capital Expenditures* Moving forward FY $MM 2024 $5 - $5.5 billion# 2023 $5,224 2022 $4,650 2021 $2,551 2020 $2,717 2019 $2,129 FY24 $MM Q1 $1,386 Q2 Q3 Q4 FY Capital expenditures are calculated independently for each quarter and may not sum to full year amount due to rounding. * Non-GAAP financial
Slide 23: Thank you
Moving forward Thank you tell me more
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