Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q1 2020 Earnings Presentation
27 slides from Air Products And Chemicals's earnings presentation, Jan 24, 2020
Slide 1: Create Shareholder Value: Q1 FY20 Earnings Conference Call
Moving forward Create Shareholder Value Q1 FY20 Earnings Conference Call January 24 2020
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 Q120 vs FY14 Q120 FY14 Employee Lost Time Injury Rate 0.24 0.06 75% better Employee Recordable Injury Rate 0.58 0.37 36% better 3 FY14 includes MT
Slide 4: 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 4
Slide 5: 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 6: 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 7: Executing our gasification strategy
Moving forward Executing our gasification strategy Energy, environmental, emerging markets Debang JV $0.25B Yankuang 2023 JV $3.5B Juitai 2023 100% APD $0.65B Jazan IG/ 2022 Gasif/Power JV $11.5B Lu’An 2020 JV $1.5B Large ASUs 2018 for China coal gasification GE Gasification Technology Shell Gasific
Slide 8: Gulf Coast Ammonia (GCA) Project, Texas City, Texas
Gulf Coast Ammonia (GCA) Project Moving forward Texas City, Texas SMR Natural Gas Hydrogen Ammonia Power Nitrogen • ~1.3 million TPY • Secure offtake Ammonia Loop agreements ASU Air Products GCA • Build, Own, Operate • Partners - Starwood • ~$0.5 billion invest - Mabanaft • ~$0.6 billion invest 8 On
Slide 9: Dividend History
Dividend History Moving forward $5.50 $5.36 $5.00 $4.50 $4.00 Dividend/Share* $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 • 18c per quarter or >15% dividend increase announced Jan 23 • ~$1.2B
Slide 10: Adjusted EBITDA margin
Adjusted EBITDA margin* Moving forward Up over 1500 basis points 41.9% 42% 40.1% 40% 40.3% 37.7% 38% 36.3% 35.9% 35.7% 36% 35.2% 34.9% 34.8% 35.8% 34.1% 34.3% 33.9% 34% 34.8% 33.2% 32.9% 33.2% 32% 31.1% 29.6% 30% 28.7% 28% 28.8% 26.5% 26% 25.1% 24% 10 * Non-GAAP financial measure. See website for re
Slide 11: Q1 Results
Q1 Results Moving forward Fav/(Unfav) vs. ($ million) Q1FY20 Q1FY19 Q4FY19 Sales $2,255 1% (1%) - Volume 6% (2%) - Price 3% -% - Energy cost pass-through (5%) 1% - Currency (1%) -% - Other (India contract modification) (2%) -% Adjusted EBITDA* $908 14% (5%) - Adjusted EBITDA Margin* 40.3% 460bp (160
Slide 12: Q1 Adjusted EPS
Q1 Adjusted EPS* Moving forward Adjusted EPS* Up $0.28 or 15% Q1FY19 Q1FY20 Change GAAP cont ops EPS $1.57 $2.14 non-GAAP items 0.29 0.00 Adjusted EPS* $1.86 $2.14 $0.28 Volume 0.15 Price (net of variable costs) 0.25 Other Cost (0.12) $0.28 Currency/FX ($0.00) Equity Affiliate Income 0.02 Non-contro
Slide 13: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) Q1FY20 LTM Adjusted EBITDA* $3,582 Interest, net (56) Cash Tax (362) Maintenance CapEx* (435) Distributable Cash Flow* $2,729 $12.30/Share* Dividends (1,008) Investable Cash Flow* $1,721 • $12.30/share of Distributable Cash Flow* • Paid about 40% of Distrib
Slide 14: Capital Deployment Scorecard
Capital Deployment Scorecard Moving forward FY18 – FY22, as of 12/31/19 Available Now (12/31/19) Total Debt Capacity $ 10.7 Assuming 3xLTM Adj EBITDA* Less: Net Debt* $ 0.9 Debt minus cash Additional Available Now $ 9.8 Estimated Available In Future $ 4.8 LTM ICF x 2.75 years – Investable Cash Flow*
Slide 15: Industrial Gases - Asia
Moving forward Industrial Gases - Asia Fav/(Unfav) vs. Q1FY20 Q1FY19 Q4FY19 Sales $693 11% (5%) - Volume 9% (6%) - Price 4% 1% - Energy cost pass-through -% -% - Currency (2%) -% Adjusted EBITDA* $347 16% (2%) - Adjusted EBITDA Margin* 50.1% 260bp 180bp Operating Income $229 13% (1%) - Operating Mar
Slide 16: Industrial Gases - Americas
Moving forward Industrial Gases - Americas Fav/(Unfav) vs. Q1FY20 Q1FY19 Q4FY19 Sales $936 (5%) -% - Volume 1% (2%) - Price 3% -% - Energy cost pass-through (8%) 2% - Currency (1%) -% Adjusted EBITDA* $410 11% (1%) - Adjusted EBITDA Margin* 43.8% 670bp (10bp) Operating Income $257 17% (1%) - Operati
Slide 17: Industrial Gases - EMEA
Moving forward Industrial Gases - EMEA Fav/(Unfav) vs. Q1FY20 Q1FY19 Q4FY19 Sales $499 (5%) 2% - Volume 6% (2%) - Price 3% 1% - Energy cost pass-through (4%) 2% - Currency (2%) 1% - Other (India contract modification) (8%) -% Adjusted EBITDA* $188 14% (3%) - Adjusted EBITDA Margin* 37.7% 610bp (180b
Slide 18: Industrial Gases - Global
Moving forward Industrial Gases - Global Fav/(Unfav) vs. Q1FY20 Q1FY19 Sales $93 $24 Adjusted EBITDA* $7 $1 Operating Income $4 $0 • Other project activities offset lower Jazan Sale of Equipment activity 18 * Non-GAAP financial measure. See website for reconciliation.
Slide 19: Corporate
Moving forward Corporate Fav/(Unfav) vs. Q1FY20 Q1FY19 Sales $34 $19 Adjusted EBITDA* ($44) ($1) Operating Income ($49) ($2) • Contribution from LNG projects offset by higher corporate costs • LNG prospects continue to improve 19 * Non-GAAP financial measure. See website for reconciliation.
Slide 20: Outlook
Moving forward Outlook* Q2 Adj. EPS* vs PY FY Adj. EPS* vs PY $2.10 to $2.20 +9% to +15% $9.35 to $9.60 +14% to +17% FY20 Capital Expenditure* = $4 - $4.5 billion 20 * Non-GAAP financial measure. See website for reconciliation.
Slide 21: Air Products Adjusted EPS
Moving forward Air Products Adjusted EPS* $10.00 $9.00 $8.00 +14% to +17% $7.00 $6.00 +10% +18% +12% $5.00 +16% +10% $4.00 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Guidance 21 * Non-GAAP financial measure. See website for reconciliation. CAGR is calculated using midpoint of FY20 guidance.
Slide 22: 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 22
Slide 23: Appendix slides
Appendix slides
Slide 24: Major projects
Major projects * Multiple Phases Plant Customer/Location Capacity Timing Market ONSTREAM (last five quarters) ASU/Liquid Ulsan, Korea 1750 TPD Q1 FY19 Pipeline ASU – Ph 3/4 Samsung Pyeongtaek, Korea World Scale Q1 FY19* Electronics Liquid ASU Middletown, Ohio 400 TPD Q1 FY19 Merchant ASU/LAR Chemour
Slide 25: Air Products Adjusted EPS
Air Products Adjusted EPS* Moving forward FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1 $1.79 $1.86 $2.14 Q2 $1.71 $1.92 $2.10 - $2.20# Q3 $1.95 $2.17 Q4 $2.00 $2.27 $4.42 $4.88 $5.64 $6.31 $7.45 $8.21 $9.35 - $9.60# $10.00 $9.00 $8.00 $7.00 +14% to +17% $6.00 +10% +18% $5.00 +12% +16% +10% $4.00 FY14 FY15
Slide 26: Capital Expenditure
Capital Expenditure* Moving forward FY $MM 2020 Outlook $4 - $4.5 billion 2019 $2,129 2018 $1,914 2017 $1,056 2016 $908 2015 $1,201 Quarter 2020 $MM Q1 $455 Q2 Q3 Q4 26 * Non-GAAP financial measure. See website for reconciliation.
Slide 27: Thank you
Moving forward Thank you tell me more
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