Air Products And Chemicals, Inc. · NYSE:APD
Air Products And Chemicals — Q2 FY2015 Earnings Presentation
31 slides from Air Products And Chemicals's earnings presentation, Apr 30, 2015
Slide 1: Create Shareholder Value – Q2 FY'15 Earnings Conference Call
Moving forward Create Shareholder Value Q2 FY’15 Earnings Conference Call April 30, 2015
Slide 2: Forward-looking statements
Forward-looking statements Moving forward NOTE: 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 and business outlook. These forward-looking statements are b
Slide 3: Safety results – YTD
Moving forward Safety results – YTD FY14 FY15 YTD YTD Change Employee Lost Time Injury Rate 0.25 0.18 28% Better Employee Recordable Injury Rate 0.64 0.45 30% Better 3
Slide 4: Our Goal
Moving forward Our Goal Air Products will be the safest and the most profitable industrial gas company in the world, providing excellent service to our customers 4
Slide 5: Creating value for shareholders
Moving forward Creating value for shareholders How are we going to do it at Air Products? • Responsible allocation of capital • Implementation of our 5 point plan 5
Slide 6: Creating shareholder value – management philosophy
Creating shareholder value Moving forward 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 Focus Capital allocation is the most important job of the CEO. Opera
Slide 7: Our Plan
Our Plan Moving forward 5 point plan summary Focus on Restructure Change Control Align the core organization culture capital/costs rewards Reward Industrial gases Decentralize Safety Capex performance Geographic EBITDA/value Key geographies Simplicity Hurdle rates alignment creation target Speed Cor
Slide 8: Jazan Project
Jazan Project Moving forward World’s Largest Industrial Gas Complex • Saudi Aramco - Largest company in the world - Jazan, Saudi Arabia Refinery – new 400,000 bpd refinery and power plant • Air Products / ACWA Holding Joint Venture to own & operate - 25% Air Products / 75% ACWA Holding - Total cost
Slide 9: Q2 Summary
Moving forward Q2 Summary FY14 FY15 Q2 Q2 Change Sales $millions $2,582 $2,415 (6%) EBITDA $millions $644 $709 +10% EBITDA % margin 25.0% 29.4% +440bp Free Cash Flow $millions $(33) $30 +$63 EPS $/share $1.32 $1.55 +17% Based on continuing ops., non-GAAP 9 measures, see appendix for reconciliation
Slide 10: EBITDA Margin Trend
Moving forward EBITDA Margin Trend 30.0% 29.4% 29.0% 28.6% 28.2% 28.0% 27.0% 26.4% 26.0% 25.0% 25.0% 24.0% Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 10
Slide 11: Q2 Summary
Moving forward Q2 Summary Fav/(Unfav) vs. ($ million) Q2 FY15 Q2 FY14 Q1 FY15 Sales $2,415 (6%) (6%) - Volume 4% -% - Price 1% -% - Energy/Raw Mat’l pass-thru (6%) (3%) - Currency (5%) (3%) EBITDA $709 10% (2%) - EBITDA Margin 29.4% 440bp 120bp Operating Income $442 15% -% - Operating Margin 18.3% 3
Slide 12: Cash Flow Focus
Moving forward Cash Flow Focus ($ million) Q2 FY14 Q2 FY15 Change EBITDA $644 $709 $65 Interest $(32) $(23) $9 Cash Tax $(33) $(93) $(60) Maintenance Capex $(102) $(49) $53 Distributable Cash Flow $477 $544 $67 Growth Capex $(360) $(349) $11 Dividends $(150) $(165) $(15) Free Cash Flow $(33) $30 $63
Slide 13: Q2 EPS Analysis
Moving forward Q2 EPS Analysis Q2 FY14 Q2 FY15 Change As reported EPS $1.32 $1.33 less non-GAAP items - (0.22) Continuing Ops. EPS $1.32 $1.55 $0.23 Volume $0.22 Price / raw materials $0.10 $0.30 Cost ($0.02) Currency ($0.09) Higher equity affiliate income $0.01 Lower interest expense $0.03 Higher s
Slide 14: Gases Americas
Moving forward Gases Americas Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $890 (14%) (11%) - Volume 1% (3%) - Price 1% -% - Energy/Raw Mat’l pass-thru (13%) (7%) - Currency (3%) (1%) EBITDA $300 7% (10%) - EBITDA Margin 33.7% 640bp 60bp Operating Income $182 7% (14%) - Operating Margin 20.4% 400bp
Slide 15: Gases EMEA
Moving forward Gases EMEA Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $449 (17%) (10%) - Volume (1%) (2%) - Price 1% -% - Energy/Raw Mat’l pass-thru (2%) -% - Currency (15%) (8%) EBITDA $127 (17%) (11%) - EBITDA Margin 28.2% 20bp (30bp) Operating Income $71 (19%) (13%) - Operating Margin 15.8% (30
Slide 16: Gases Asia
Moving forward Gases Asia Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $393 7% (1%) - Volume 15% 1% - Price (3%) (1%) - Energy/Raw Mat’l pass-thru (2%) -% - Currency (3%) (1%) EBITDA $144 14% (7%) - EBITDA Margin 36.7% 200bp (210bp) Operating Income $85 19% (6%) - Operating Margin 21.6% 210bp (110b
Slide 17: Materials Technologies
Moving forward Materials Technologies Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $533 7% 2% - Volume 9% 2% - Price 2% 2% - Currency (4%) (2%) EBITDA $148 27% 15% - EBITDA Margin 27.8% 440bp 310bp Operating Income $124 32% 19% - Operating Margin 23.3% 450bp 330bp Electronic Materials sales 16% 1%
Slide 18: Outlook
Moving forward Outlook FQ3 EPS $1.55 - $1.60 FY2015 EPS $6.35 - $6.55 Capital Spending approx. $1.7 billion Based on continuing ops., non-GAAP 18 measures - see appendix for reconciliation
Slide 19: Appendix Slides
Appendix Slides
Slide 20: Gases - Global
Moving forward Gases - Global Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $67 ($1) $8 EBITDA ($3) $10 $11 Operating Income ($8) $7 $10 • Ongoing business flat, negative currency impact • Positive profit impact from contract wrap-up 20 non-GAAP measures - see appendix for reconciliation
Slide 21: Corporate and other
Moving forward Corporate and other Fav/(Unfav) vs. Q2 FY15 Q2 FY14 Q1 FY15 Sales $82 $9 $7 EBITDA ($6) $11 $14 Operating Income ($9) $11 $14 • Sales and profit growth from LNG project activity 21 non-GAAP measures - see appendix for reconciliation
Slide 22: Major Projects
Major Projects Moving forward Plant Location Capacity Timing Market ONSTREAM (last five quarters) ASU Tainan, Taiwan Multiple Plants Onstream Electronics H2 St. Charles, LA World Scale Onstream Refinery (Pipeline) Helium Wyoming 200 MMSCFY Onstream Merchant Helium ASU/Liquid PCEC, Weinan, China 8,20
Slide 23: Capital Expenditure: non-GAAP basis
Capital Expenditure: Moving forward non-GAAP basis FY $MM 2015 Forecast Approx. $1.7 billion 2014 $1,885 2013 $1,997 2012 $2,088 2011 $1,539 2010 $1,298 2009 $1,475 2008 $1,355 2007 $1,635 Includes Capital Expenditures - GAAP basis, plus Capital Lease expenditures and Purchase of non-controlling int
Slide 24: Air Products EPS
Moving forward Air Products EPS FY11 FY12 FY13 FY14 FY15 Q1 $1.25 $1.26 $1.30 $1.34 $1.55 Q2 $1.33 $1.31 $1.37 $1.32 $1.55 Q3 $1.37 $1.41 $1.36 $1.46 $1.55-$1.60 Q4 $1.41 $1.42 $1.47 $1.66 - FY $5.36 $5.40 $5.50 $5.78 $6.35-$6.55 Based on continuing ops., non-GAAP 24 measures - see appendix for reco
Slide 25: Appendix: Q215 Results
Appendix: Q215 Results Moving forward ($ Millions, except per share data) GAAP Measure Non GAAP Adjustments (2) Non GAAP Measure $ % $ % Q215 vs. Q214 - Total Company Q215 Q214 Change Change Q215 Q215 Q214 Change Change Sales 2,414.5 2,581.9 (167.4) (6%) 2,414.5 2,581.9 (167.4) (6%) Operating Income
Slide 26: Appendix: Adjusted EBITDA Trend
Moving forward Appendix: Adjusted EBITDA Trend Q215 vs PY Q215 vs PQ $ Millions Q114 Q214 Q314 Q414 FY14 Q115 Q215 $ % $ % Income From Continuing Operations 296.0 291.5 323.5 77.5 988.5 337.5 296.9 Add: Interest expense 33.3 31.5 31.3 29.0 125.1 29.1 23.4 Add: Income tax provision 94.5 92.1 102.1 77
Slide 27: Appendix: Adjusted EBITDA by Segment
Appendix: Adjusted EBITDA by Segment Moving forward Q215 vs PY Q215 vs PQ $ Millions Q114 Q214 Q314 Q414 FY14 Q115 Q215 $ % $ % Gases - Americas Operating Income 184.5 169.6 188.9 219.6 762.6 211.2 182.0 Add: Depreciation and amortization 104.0 99.4 105.6 105.4 414.4 103.6 103.3 Add Equity Affiliate
Slide 28: Appendix: ROCE
Appendix: ROCE Moving forward $ Millions Quarter Ended Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Numerator Operating Income Reported 389.7 383.1 179.2 385.6 384.7 413.8 144.1 430.0 374.4 Equity Affiliate Income 39.8 44.2 42.4 38.2 30.4 43.1 39.7 43.1 33.0 Earnings before tax as reported 429.
Slide 29: Appendix: ROCE Tax Rate
Moving forward Appendix: ROCE Tax Rate ($ Millions) Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Reported Income Before Taxes 394.3 391.9 186.2 390.5 383.6 425.6 154.8 444.0 384.0 Tax Expense 95.8 94.1 25.8 94.5 92.1 102.1 77.3 106.5 87.1 Tax Rate Reported 24.3% 24.0% 13.9% 24.2% 24.0% 24.0% 49.9% 2
Slide 30: Appendix: Guidance
Appendix Moving forward Guidance EPS Guidance Capital Expenditure Guidance Diluted Q315 Guidance vs PQ EPS(1) $Millions Q215 GAAP $1.33 FY14 GAAP 1,682.2 Business restructuring charge $0.18 Capital lease expenditures 202.4 Pension settlement loss $0.04 Purchase of non-controlling interests 0.5 Q215
Slide 31: Thank you
Moving forward Thank you tell me more
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