Q1 FY24 (comparisons versus prior year):
- GAAP EPS# of $2.73, up
six percent; GAAP net income of $622
million, up six percent; and GAAP net income margin of 20.7
percent, up 230 basis points
- Adjusted EPS* of $2.82, up seven
percent; adjusted EBITDA* of $1.2
billion, up eight percent; and adjusted EBITDA margin* of
39.2 percent, up 510 basis points
Recent Highlights
- Increased quarterly dividend to $1.77 per share in January, the 42nd consecutive
year of increases
Guidance
- Updated fiscal 2024 full-year adjusted EPS guidance* of
$12.20 to $12.50, up six to nine percent over prior year
adjusted EPS*; fiscal 2024 second quarter adjusted EPS guidance* of
$2.60 to $2.75
- Continue to expect fiscal year 2024 capital expenditures* of
$5.0 billion to $5.5 billion
#Earnings per share is calculated and
presented on a diluted basis from continuing operations
attributable to Air Products.
*Certain results in this release, including in the highlights
above, include references to non-GAAP financial measures on a
consolidated, continuing operations basis and a segment basis.
Additional information regarding these measures and reconciliations
of GAAP to non-GAAP historical results can be found below. In
addition, as discussed below, it is not possible, without
unreasonable efforts, to identify the timing or occurrence of
future events, transactions, and/or investment activity that could
have a significant effect on the Company's future GAAP EPS or cash
flow used for investing activities if any of these events were to
occur.
Fiscal 2024 First Quarter Consolidated Results
LEHIGH
VALLEY, Pa., Feb. 5, 2024
/PRNewswire/ -- Air Products (NYSE:APD) today reported first
quarter fiscal 2024 results, including GAAP EPS from continuing
operations of $2.73, up six percent
from prior year. GAAP net income of $622
million was up six percent over the prior year due to higher
equity affiliates' income, higher pricing, and higher volumes,
partially offset by higher costs. GAAP net income margin of 20.7
percent increased 230 basis points over the prior year, which
included a positive impact of about 200 basis points from lower
energy cost pass-through. Air Products' GAAP results include costs
for the non-service related components of the Company's defined
benefit pension plans, which are reflected as adjustments to the
non-GAAP measures discussed below.
For the quarter, on a non-GAAP basis, adjusted EPS from
continuing operations of $2.82
increased seven percent over the prior year. Adjusted EBITDA of
$1.2 billion was up eight percent
over the prior year, due to higher equity affiliates' income,
higher volumes, and higher pricing, partially offset by higher
costs. Adjusted EBITDA margin of 39.2 percent increased 510
basis points over the prior year, which included a positive impact
of about 400 basis points from lower energy cost pass-through.
First quarter sales of $3.0
billion decreased six percent from the prior year, as three
percent higher volumes, one percent higher pricing, and one percent
favorable currency were more than offset by 11 percent lower energy
cost pass-through, which negatively affected sales but had no
impact on net income.
Commenting on the results, Air Products' Chairman, President and
Chief Executive Officer Seifi
Ghasemi said, "Despite significant geopolitical and economic
headwinds, the team at Air Products performed well, increasing our
adjusted EPS by seven percent over last year. Our reported results
were lower than our expectations, mainly due to a slowdown in
manufacturing in Asia,
particularly in China; lower
helium demand; cost headwinds from a sale of equipment project; and
currency devaluation in Argentina.
We are moving forward to successfully implement our ambitious,
long-term growth strategy through our core industrial gases
business and as a leader in low-carbon intensity hydrogen to
generate a cleaner future for the world."
Fiscal 2024 First Quarter Results by Business Segment
- Americas sales of $1.3
billion were down 10 percent versus the prior year, as three
percent higher volumes driven by strong hydrogen demand and two
percent higher pricing were more than offset by 15 percent lower
energy cost pass-through. Operating income of $354 million increased three percent and adjusted
EBITDA of $561 million increased nine
percent, in each case primarily due to higher pricing and volumes,
partially offset by higher costs. Adjusted EBITDA also benefited
from higher equity affiliates' income. Operating margin of 28.3
percent increased 350 basis points and adjusted EBITDA margin of
44.8 percent increased 760 basis points. The operating margin and
adjusted EBITDA margin improvements included positive impacts from
lower energy cost pass-through of approximately 400 basis points
and 600 basis points, respectively.
- Asia sales of
$794 million increased two percent
over the prior year, as two percent higher energy cost pass-through
and one percent higher pricing were partially offset by one percent
unfavorable currency. Volumes were flat, as higher on-site volumes
were offset by weak economic growth in China and lower activity in helium. Operating
income of $211 million decreased 10
percent and adjusted EBITDA of $327
million decreased five percent, in each case primarily due
to unfavorable volume mix and higher costs. Operating margin of
26.6 percent decreased 370 basis points and adjusted EBITDA margin
of 41.2 percent decreased 320 basis points.
- Europe sales of
$731 million decreased eight percent
from the prior year, as nine percent favorable volumes driven by
our on-site business and five percent favorable currency were more
than offset by 20 percent lower energy cost pass-through and two
percent lower pricing. Operating income of $198 million increased 36 percent and adjusted
EBITDA of $267 million increased 28
percent, as higher volumes, lower power costs, and favorable
currency more than offset inflation and higher maintenance costs.
Operating margin of 27.0 percent increased 860 basis points and
adjusted EBITDA margin of 36.4 percent increased 1,020 basis
points. The operating margin and adjusted EBITDA margin
improvements included positive impacts from lower energy cost
pass-through of approximately 350 basis points and 550 basis
points, respectively.
- Middle East and
India equity affiliates income
of $93 million increased 45 percent
compared to the prior year, primarily due to the completion of the
second phase of the Jazan project in January
2023.
- Corporate and other sales of $185
million increased three percent compared to the prior year
and reflected higher LNG sale of equipment activity.
Outlook
Air Products now expects full-year fiscal 2024
adjusted EPS guidance* of $12.20 to
$12.50, up six to nine percent over
prior year adjusted EPS. For the second quarter of fiscal
2024, Air Products' adjusted EPS guidance* is $2.60 to $2.75.
Air Products continues to expect capital expenditures* of
$5.0 billion to $5.5 billion for full-year fiscal 2024.
|
*Management is unable
to reconcile, without unreasonable effort, the Company's forecasted
range of adjusted EPS
or capital expenditures to a comparable GAAP range. Air Products
provides adjusted EPS guidance on a continuing
operations basis, excluding the impact of certain items that
management believes are not representative of the
Company's underlying business performance, such as the incurrence
of costs for cost reduction actions and
impairment charges, or the recognition of gains or losses on
certain disclosed items. It is not possible, without
unreasonable efforts, to predict the timing or occurrence of these
events or the potential for other transactions that
may impact future GAAP EPS. Similarly, it is not possible, without
unreasonable efforts, to reconcile forecasted
capital expenditures to future cash used for investing activities
because management is not able to identify the
timing or occurrence of future investment activity, which is driven
by management's assessment of competing
opportunities at the time the Company enters into transactions.
Furthermore, it is not possible to identify the
potential significance of these events in advance, but any of these
events, if they were to occur, could have a
significant effect on the Company's future GAAP results
|
|
Earnings Teleconference
Access the fiscal 2024 first
quarter earnings teleconference scheduled for 8:30 a.m. Eastern Time on February 5, 2024
by calling 323-994-2093 and entering passcode 1702171 or by
accessing the Event Details page on Air Products' Investor
Relations website.
About Air Products
Air Products (NYSE:APD) is a
world-leading industrial gases company in operation for over 80
years focused on serving energy, environmental, and emerging
markets. The Company has two growth pillars driven by
sustainability. Air Products' base business provides essential
industrial gases, related equipment and applications expertise to
customers in dozens of industries, including refining, chemicals,
metals, electronics, manufacturing, and food. The Company also
develops, engineers, builds, owns and operates some of the world's
largest clean hydrogen projects supporting the transition to low-
and zero-carbon energy in the heavy-duty transportation and
industrial sectors. Additionally, Air Products is the world leader
in the supply of liquefied natural gas process technology and
equipment, and provides turbomachinery, membrane systems and
cryogenic containers globally.
The Company had fiscal 2023 sales of $12.6 billion from operations in approximately 50
countries and has a current market capitalization of about
$60 billion. Approximately 23,000
passionate, talented and committed employees from diverse
backgrounds are driven by Air Products' higher purpose to create
innovative solutions that benefit the environment, enhance
sustainability and reimagine what's possible to address the
challenges facing customers, communities, and the world. For more
information, visit www.airproducts.com or follow us on LinkedIn, X,
Facebook or Instagram.
Cautionary Note Regarding Forward-Looking
Statements
This release contains "forward-looking
statements" within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including statements
about earnings and capital expenditure guidance, business outlook
and investment opportunities. Forward-looking statements are based
on management's expectations and assumptions as of the date of this
release and are not guarantees of future performance. While
forward-looking statements are made in good faith and based on
assumptions, expectations and projections that management believes
are reasonable based on currently available information, actual
performance and financial results may differ materially from
projections and estimates expressed in the forward-looking
statements because of many factors, including, without limitation:
changes in global or regional economic conditions, inflation, and
supply and demand dynamics in the market segments we serve,
including demand for technologies and projects to limit the impact
of global climate change; changes in the financial markets that may
affect the availability and terms on which we may obtain financing;
the ability to implement price increases to offset cost increases;
disruptions to our supply chain and related distribution delays and
cost increases; risks associated with having extensive
international operations, including political risks, risks
associated with unanticipated government actions and risks of
investing in developing markets; project delays, scope changes,
cost escalations, contract terminations, customer cancellations, or
postponement of projects and sales; our ability to safely develop,
operate, and manage costs of large-scale and technically complex
projects; the future financial and operating performance of major
customers, joint ventures, and equity affiliates; our ability to
develop, implement, and operate new technologies and to market
products produced utilizing new technologies; our ability to
execute the projects in our backlog and refresh our pipeline of new
projects; tariffs, economic sanctions and regulatory activities in
jurisdictions in which we and our affiliates and joint ventures
operate; the impact of environmental, tax, safety, or other
legislation, as well as regulations and other public policy
initiatives affecting our business and the business of our
affiliates and related compliance requirements, including
legislation, regulations, or policies intended to address global
climate change; changes in tax rates and other changes in tax law;
safety incidents relating to our operations; the timing, impact,
and other uncertainties relating to acquisitions and divestitures,
including our ability to integrate acquisitions and separate
divested businesses, respectively; risks relating to cybersecurity
incidents, including risks from the interruption, failure or
compromise of our information systems or those of our business
partners or service providers; catastrophic events, such as natural
disasters and extreme weather events, pandemics and other public
health crises, acts of war, including Russia's invasion of Ukraine and new and ongoing conflicts in the
Middle East, or terrorism; the
impact on our business and customers of price fluctuations in oil
and natural gas and disruptions in markets and the economy due to
oil and natural gas price volatility; costs and outcomes of legal
or regulatory proceedings and investigations; asset impairments due
to economic conditions or specific events; significant fluctuations
in inflation, interest rates, and foreign currency exchange rates
from those currently anticipated; damage to facilities, pipelines
or delivery systems, including those we are constructing or that we
own or operate for third parties; availability and cost of electric
power, natural gas, and other raw materials; the success of
productivity and operational improvement programs; and other risks
described in our Annual Report on Form 10-K for the fiscal year
ended September 30, 2023 and
subsequent filings we have made with the U.S. Securities and
Exchange Commission. You are cautioned not to place undue reliance
on our forward-looking statements. Except as required by law, we
disclaim any obligation or undertaking to update or revise any
forward-looking statements contained herein to reflect any change
in assumptions, beliefs, or expectations or any change in events,
conditions, or circumstances upon which any such forward-looking
statements are based.
Air Products and
Chemicals, Inc. and Subsidiaries CONSOLIDATED INCOME
STATEMENTS (Unaudited)
|
|
|
|
Three Months
Ended
|
|
31 December
|
(Millions of U.S.
Dollars, except for share and per share data)
|
2023
|
2022
|
Sales
|
$2,997.4
|
$3,174.7
|
Cost of
sales
|
2,067.2
|
2,272.3
|
Selling and
administrative expense
|
238.4
|
234.4
|
Research and
development expense
|
25.7
|
24.4
|
Other income (expense),
net
|
0.8
|
8.4
|
Operating
Income
|
666.9
|
652.0
|
Equity affiliates'
income
|
158.4
|
110.0
|
Interest
expense
|
53.5
|
41.2
|
Other non-operating
income (expense), net
|
(14.8)
|
(0.6)
|
Income Before
Taxes
|
757.0
|
720.2
|
Income tax
provision
|
135.4
|
136.4
|
Net
Income
|
621.6
|
583.8
|
Net income attributable
to noncontrolling interests
|
12.3
|
11.6
|
Net Income
Attributable to Air Products
|
$609.3
|
$572.2
|
|
|
|
Per Share Data
(U.S. Dollars per share)
|
|
|
Basic earnings per
share attributable to Air Products
|
$2.74
|
$2.58
|
Diluted earnings per
share attributable to Air Products
|
$2.73
|
$2.57
|
|
|
|
Weighted Average
Common Shares (in millions)
|
|
|
Basic
|
222.5
|
222.2
|
Diluted
|
222.8
|
222.6
|
Air Products and
Chemicals, Inc. and Subsidiaries CONSOLIDATED BALANCE
SHEETS (Unaudited)
|
|
|
|
31 December
|
30 September
|
(Millions of U.S.
Dollars)
|
2023
|
2023
|
Assets
|
|
|
Current
Assets
|
|
|
Cash and cash
items
|
$1,962.6
|
$1,617.0
|
Short-term
investments
|
271.8
|
332.2
|
Trade receivables,
net
|
1,725.4
|
1,700.4
|
Inventories
|
709.3
|
651.8
|
Prepaid
expenses
|
206.8
|
177.0
|
Other receivables and
current assets
|
773.6
|
722.1
|
Total Current
Assets
|
5,649.5
|
5,200.5
|
Investment in net
assets of and advances to equity affiliates
|
4,685.2
|
4,617.8
|
Plant and equipment, at
cost
|
34,793.9
|
32,746.3
|
Less: accumulated
depreciation
|
15,858.4
|
15,274.2
|
Plant and equipment,
net
|
18,935.5
|
17,472.1
|
Goodwill,
net
|
899.4
|
861.7
|
Intangible assets,
net
|
339.1
|
334.6
|
Operating lease
right-of-use assets, net
|
978.8
|
974.0
|
Noncurrent lease
receivables
|
485.9
|
494.7
|
Financing
receivables
|
1,119.1
|
817.2
|
Other noncurrent
assets
|
1,025.7
|
1,229.9
|
Total Noncurrent
Assets
|
28,468.7
|
26,802.0
|
Total
Assets
|
$34,118.2
|
$32,002.5
|
Liabilities and
Equity
|
|
|
Current
Liabilities
|
|
|
Payables and accrued
liabilities
|
$2,717.9
|
$2,890.1
|
Accrued income
taxes
|
166.9
|
131.2
|
Short-term
borrowings
|
16.4
|
259.5
|
Current portion of
long-term debt
|
218.0
|
615.0
|
Total Current
Liabilities
|
3,119.2
|
3,895.8
|
Long-term
debt
|
11,715.4
|
9,280.6
|
Long-term debt –
related party
|
157.9
|
150.7
|
Noncurrent operating
lease liabilities
|
635.1
|
631.1
|
Other noncurrent
liabilities
|
1,111.5
|
1,118.0
|
Deferred income
taxes
|
1,250.0
|
1,266.0
|
Total Noncurrent
Liabilities
|
14,869.9
|
12,446.4
|
Total
Liabilities
|
17,989.1
|
16,342.2
|
Air Products
Shareholders' Equity
|
14,873.0
|
14,312.9
|
Noncontrolling
Interests
|
1,256.1
|
1,347.4
|
Total
Equity
|
16,129.1
|
15,660.3
|
Total Liabilities
and Equity
|
$34,118.2
|
$32,002.5
|
Air Products and
Chemicals, Inc. and Subsidiaries CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
|
|
|
|
Three Months
Ended
|
|
31 December
|
(Millions of U.S.
Dollars)
|
2023
|
2022
|
Operating
Activities
|
|
|
Net income
|
$621.6
|
$583.8
|
Less: Net income
attributable to noncontrolling interests
|
12.3
|
11.6
|
Net income attributable
to Air Products
|
$609.3
|
$572.2
|
Adjustments to
reconcile income to cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
349.2
|
321.5
|
Deferred income
taxes
|
13.5
|
13.8
|
(Undistributed)
distributed earnings of equity method investments
|
(41.5)
|
17.2
|
Gain on sale of assets
and investments
|
(1.4)
|
(2.3)
|
Share-based
compensation
|
13.8
|
16.1
|
Noncurrent lease
receivables
|
20.0
|
19.4
|
Other
adjustments
|
33.3
|
99.0
|
Working capital changes
that provided (used) cash, excluding effects of
acquisitions:
|
|
|
Trade
receivables
|
11.8
|
40.4
|
Inventories
|
(48.6)
|
(102.8)
|
Other
receivables
|
(64.5)
|
(6.7)
|
Payables and accrued
liabilities
|
(268.5)
|
(257.6)
|
Other working
capital
|
0.2
|
(10.9)
|
Cash Provided by
Operating Activities
|
$626.6
|
$719.3
|
Investing
Activities
|
|
|
Additions to plant and
equipment, including long-term deposits
|
(1,445.5)
|
(834.2)
|
Investment in financing
receivables
|
(301.8)
|
—
|
Proceeds from sale of
assets and investments
|
4.2
|
4.0
|
Purchases of
investments
|
(55.5)
|
(19.2)
|
Proceeds from
investments
|
120.1
|
591.5
|
Other investing
activities
|
12.9
|
1.7
|
Cash Used for
Investing Activities
|
($1,665.6)
|
($256.2)
|
Financing
Activities
|
|
|
Long-term debt
proceeds
|
810.4
|
476.3
|
Payments on long-term
debt
|
(54.8)
|
(195.9)
|
Net increase (decrease)
in commercial paper and short-term borrowings
|
1,020.9
|
(4.1)
|
Dividends paid to
shareholders
|
(388.9)
|
(359.4)
|
Proceeds from stock
option exercises
|
5.3
|
14.0
|
Investments by
noncontrolling interests
|
34.5
|
—
|
Other financing
activities
|
(64.6)
|
(16.5)
|
Cash Provided by
(Used for) Financing Activities
|
$1,362.8
|
($85.6)
|
Effect of Exchange
Rate Changes on Cash
|
21.8
|
42.5
|
Increase in cash and
cash items
|
345.6
|
420.0
|
Cash and cash items –
Beginning of year
|
1,617.0
|
2,711.0
|
Cash and Cash Items
– End of Period
|
$1,962.6
|
$3,131.0
|
Supplemental Cash
Flow Information
|
|
|
Cash paid for taxes,
net of refunds
|
$90.1
|
$88.5
|
Air Products and
Chemicals, Inc. and Subsidiaries BUSINESS SEGMENT
INFORMATION (Unaudited)
|
|
|
(Millions of U.S.
Dollars)
|
Americas
|
Asia
|
Europe
|
Middle
East and India
|
Corporate and
other
|
Total
|
Three Months Ended
31 December 2023
|
Sales
|
$1,252.1
|
$793.8
|
$731.2
|
$35.4
|
$184.9
|
$2,997.4
|
Operating income
(loss)
|
354.4
|
211.2
|
197.6
|
3.9
|
(100.2)
|
666.9
|
Depreciation and
amortization
|
169.7
|
111.8
|
48.2
|
6.6
|
12.9
|
349.2
|
Equity affiliates'
income
|
37.1
|
4.2
|
20.7
|
92.9
|
3.5
|
158.4
|
Three Months Ended
31 December 2022
|
Sales
|
$1,384.2
|
$777.8
|
$791.9
|
$41.4
|
$179.4
|
$3,174.7
|
Operating income
(loss)
|
343.0
|
235.9
|
145.8
|
6.7
|
(79.4)
|
652.0
|
Depreciation and
amortization
|
156.0
|
101.9
|
44.3
|
6.6
|
12.7
|
321.5
|
Equity affiliates'
income
|
16.4
|
7.4
|
17.7
|
64.1
|
4.4
|
110.0
|
Total
Assets
|
|
|
|
|
|
|
31 December
2023
|
$10,666.2
|
$7,318.0
|
$5,120.9
|
$6,214.1
|
$4,799.0
|
$34,118.2
|
30 September
2023
|
9,927.5
|
7,009.6
|
4,649.8
|
5,708.4
|
4,707.2
|
32,002.5
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES
(Millions of U.S. Dollars unless otherwise
indicated, except for per share data)
We present certain financial measures, other than in accordance
with U.S. generally accepted accounting principles ("GAAP"), on an
"adjusted" or "non-GAAP" basis. On a consolidated basis, these
measures include adjusted diluted earnings per share ("EPS"),
adjusted EBITDA, adjusted EBITDA margin, and capital expenditures.
On a segment basis, these measures include adjusted EBITDA and
adjusted EBITDA margin. In addition to these measures, we also
present certain supplemental non-GAAP financial measures to help
the reader understand the impact that certain disclosed items, or
"non-GAAP adjustments," have on the calculation of our adjusted
diluted EPS. For each non-GAAP financial measure, we present a
reconciliation to the most directly comparable financial measure
calculated in accordance with GAAP.
In many cases, non-GAAP financial measures are determined by
adjusting the most directly comparable GAAP measure to exclude
non-GAAP adjustments that we believe are not representative of our
underlying business performance. For example, we exclude the impact
of the non-service components of net periodic benefit/cost for our
defined benefit pension plans. Non-service related components are
recurring, non-operating items that include interest cost, expected
returns on plan assets, prior service cost amortization, actuarial
loss amortization, as well as special termination benefits,
curtailments, and settlements. The net impact of non-service
related components is reflected within "Other non-operating income
(expense), net" on our consolidated income statements. Adjusting
for the impact of non-service pension components provides
management and users of our financial statements with a more
accurate representation of our underlying business performance
because these components are driven by factors that are unrelated
to our operations, such as volatility in equity and debt markets.
Further, non-service related components are not indicative of our
defined benefit plans' future contribution needs due to the funded
status of the plans. We may also exclude certain expenses
associated with cost reduction actions, impairment charges, and
gains on disclosed transactions. The reader should be aware that we
may recognize similar losses or gains in the future.
When applicable, the tax impact of our pre-tax non-GAAP
adjustments reflects the expected current and deferred income tax
impact of our non-GAAP adjustments. These tax impacts are primarily
driven by the statutory tax rate of the various relevant
jurisdictions and the taxability of the adjustments in those
jurisdictions.
We provide these non-GAAP financial measures to allow investors,
potential investors, securities analysts, and others to evaluate
the performance of our business in the same manner as our
management. We believe these measures, when viewed together with
financial results computed in accordance with GAAP, provide a more
complete understanding of the factors and trends affecting our
historical financial performance and projected future results.
However, we caution readers not to consider these measures in
isolation or as a substitute for the most directly comparable
measures calculated in accordance with GAAP. Readers should also
consider the limitations associated with these non-GAAP financial
measures, including the potential lack of comparability of these
measures from one company to another.
ADJUSTED DILUTED EPS
The table below provides a reconciliation to the most directly
comparable GAAP measure for each of the major components used to
calculate adjusted diluted EPS from continuing operations, which we
view as a key performance metric. In periods that we have non-GAAP
adjustments, we believe it is important for the reader to
understand the per share impact of each such adjustment because
management does not consider these impacts when evaluating
underlying business performance. Per share impacts are calculated
independently and may not sum to total diluted EPS and total
adjusted diluted EPS due to rounding.
|
Three Months Ended 31
December
|
Q1 2024 vs. Q1
2023
|
Operating Income
|
Equity
Affiliates'
Income
|
Other Non-
Operating
Income/Expens
e, Net
|
Income Tax
Provision
|
Net Income
Attributable to
Air Products
|
Diluted EPS
|
Q1 2024 GAAP
|
$666.9
|
$158.4
|
($14.8)
|
$135.4
|
$609.3
|
$2.73
|
Q1 2023 GAAP
|
652.0
|
110.0
|
(0.6)
|
136.4
|
572.2
|
2.57
|
$ Change
GAAP
|
|
|
|
|
|
$0.16
|
% Change
GAAP
|
|
|
|
|
|
6 %
|
|
|
|
|
|
|
|
Q1 2024 GAAP
|
$666.9
|
$158.4
|
($14.8)
|
$135.4
|
$609.3
|
$2.73
|
Non-service pension
cost, net
|
—
|
—
|
24.9
|
6.2
|
18.7
|
0.08
|
Q1 2024 Non-GAAP ("Adjusted")
|
$666.9
|
$158.4
|
$10.1
|
$141.6
|
$628.0
|
$2.82
|
|
|
|
|
|
|
|
Q1 2023 GAAP
|
$652.0
|
$110.0
|
($0.6)
|
$136.4
|
$572.2
|
$2.57
|
Non-service pension
cost, net
|
—
|
—
|
19.5
|
4.9
|
14.6
|
0.07
|
Q1 2023 Non-GAAP ("Adjusted")
|
$652.0
|
$110.0
|
$18.9
|
$141.3
|
$586.8
|
$2.64
|
$ Change Non-GAAP
("Adjusted")
|
|
|
|
|
|
$0.18
|
% Change Non-GAAP
("Adjusted")
|
|
|
|
|
|
7 %
|
|
|
|
|
|
|
|
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
We define adjusted EBITDA as net income less income from
discontinued operations, net of tax, and excluding non-GAAP
adjustments, which we do not believe to be indicative of underlying
business trends, before interest expense, other non-operating
income (expense), net, income tax provision, and depreciation and
amortization expense. Adjusted EBITDA and adjusted EBITDA margin
provide useful metrics for management to assess operating
performance. Margins are calculated independently for each period
by dividing each line item by consolidated sales for the respective
period and may not sum to total margin due to rounding.
The tables below present consolidated sales and a reconciliation
of net income on a GAAP basis to adjusted EBITDA and net income
margin on a GAAP basis to adjusted EBITDA margin:
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY2024
|
2024
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Sales
|
$2,997.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income and net
income margin
|
$621.6
|
20.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Income from
discontinued
operations, net of tax
|
—
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Interest
expense
|
53.5
|
1.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Other
non-operating income
(expense), net
|
(14.8)
|
(0.5 %)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Income tax
provision
|
135.4
|
4.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Depreciation and
amortization
|
349.2
|
11.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA and
adjusted
EBITDA margin
|
$1,174.5
|
39.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY2023
|
2023
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
|
$
|
Margin
|
Sales
|
$3,174.7
|
|
|
$3,200.1
|
|
|
$3,033.9
|
|
|
$3,191.3
|
|
|
$12,600.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income and net
income margin
|
$583.8
|
18.4 %
|
|
$449.9
|
14.1 %
|
|
$610.5
|
20.1 %
|
|
$694.4
|
21.8 %
|
|
$2,338.6
|
18.6 %
|
Less: Income from
discontinued
operations, net of tax
|
—
|
— %
|
|
—
|
— %
|
|
—
|
— %
|
|
7.4
|
0.2 %
|
|
7.4
|
0.1 %
|
Add: Interest
expense
|
41.2
|
1.3 %
|
|
40.9
|
1.3 %
|
|
47.4
|
1.6 %
|
|
48.0
|
1.5 %
|
|
177.5
|
1.4 %
|
Less: Other
non-operating income
(expense), net
|
(0.6)
|
— %
|
|
(13.9)
|
(0.4 %)
|
|
(11.7)
|
(0.4 %)
|
|
(12.8)
|
(0.4 %)
|
|
(39.0)
|
(0.3 %)
|
Add: Income tax
provision
|
136.4
|
4.3 %
|
|
121.0
|
3.8 %
|
|
139.6
|
4.6 %
|
|
154.2
|
4.8 %
|
|
551.2
|
4.4 %
|
Add: Depreciation and
amortization
|
321.5
|
10.1 %
|
|
339.6
|
10.6 %
|
|
339.9
|
11.2 %
|
|
357.3
|
11.2 %
|
|
1,358.3
|
10.8 %
|
Add: Business and asset
actions
|
—
|
— %
|
|
185.6
|
5.8 %
|
|
59.0
|
1.9 %
|
|
—
|
— %
|
|
244.6
|
1.9 %
|
Adjusted EBITDA and
adjusted
EBITDA margin
|
$1,083.5
|
34.1 %
|
|
$1,150.9
|
36.0 %
|
|
$1,208.1
|
39.8 %
|
|
$1,259.3
|
39.5 %
|
|
$4,701.8
|
37.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
vs. 2023
|
Q1
|
|
|
|
|
|
|
|
|
Change
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income $
change
|
$37.8
|
|
|
|
|
|
|
|
|
Net income %
change
|
6 %
|
|
|
|
|
|
|
|
|
Net income margin
change
|
230 bp
|
|
|
|
|
|
|
|
|
Change
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA $
change
|
$91.0
|
|
|
|
|
|
|
|
|
Adjusted EBITDA %
change
|
8 %
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
change
|
510 bp
|
|
|
|
|
|
|
|
|
The tables below present sales and a reconciliation of operating
income and operating margin to adjusted EBITDA and adjusted EBITDA
margin for the Company's three largest regional segments for the
three months ended 31 December 2023
and 2022:
Americas
|
Q1 FY24
|
Q1 FY23
|
|
$ Change
|
Change
|
Sales
|
$1,252.1
|
$1,384.2
|
|
($132.1)
|
(10 %)
|
|
|
|
|
|
|
Operating
income
|
$354.4
|
$343.0
|
|
$11.4
|
3 %
|
Operating
margin
|
28.3 %
|
24.8 %
|
|
|
350
bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$354.4
|
$343.0
|
|
|
|
Add: Depreciation and
amortization
|
169.7
|
156.0
|
|
|
|
Add: Equity affiliates'
income
|
37.1
|
16.4
|
|
|
|
Adjusted
EBITDA
|
$561.2
|
$515.4
|
|
$45.8
|
9 %
|
Adjusted EBITDA
margin
|
44.8 %
|
37.2 %
|
|
|
760
bp
|
Asia
|
Q1 FY24
|
Q1 FY23
|
|
$ Change
|
Change
|
Sales
|
$793.8
|
$777.8
|
|
$16.0
|
2 %
|
|
|
|
|
|
|
Operating
income
|
$211.2
|
$235.9
|
|
($24.7)
|
(10 %)
|
Operating
margin
|
26.6 %
|
30.3 %
|
|
|
(370) bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$211.2
|
$235.9
|
|
|
|
Add: Depreciation and
amortization
|
111.8
|
101.9
|
|
|
|
Add: Equity affiliates'
income
|
4.2
|
7.4
|
|
|
|
Adjusted
EBITDA
|
$327.2
|
$345.2
|
|
($18.0)
|
(5 %)
|
Adjusted EBITDA
margin
|
41.2 %
|
44.4 %
|
|
|
(320) bp
|
Europe
|
Q1 FY24
|
Q1 FY23
|
|
$ Change
|
Change
|
Sales
|
$731.2
|
$791.9
|
|
($60.7)
|
(8 %)
|
|
|
|
|
|
|
Operating
income
|
$197.6
|
$145.8
|
|
$51.8
|
36 %
|
Operating
margin
|
27.0 %
|
18.4 %
|
|
|
860
bp
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP:
|
|
|
|
|
|
Operating
income
|
$197.6
|
$145.8
|
|
|
|
Add: Depreciation and
amortization
|
48.2
|
44.3
|
|
|
|
Add: Equity affiliates'
income
|
20.7
|
17.7
|
|
|
|
Adjusted
EBITDA
|
$266.5
|
$207.8
|
|
$58.7
|
28 %
|
Adjusted EBITDA
margin
|
36.4 %
|
26.2 %
|
|
|
1,020 bp
|
CAPITAL EXPENDITURES
Capital expenditures is a non-GAAP financial measure that we
define as the sum of cash flows for additions to plant and
equipment, including long-term deposits, acquisitions (less cash
acquired), investment in and advances to unconsolidated affiliates,
and investment in financing receivables on our consolidated
statements of cash flows. Additionally, we adjust additions to
plant and equipment to exclude NEOM Green Hydrogen Company
("NGHC") expenditures funded by the joint venture's non-recourse
project financing as well as our partners' equity contributions to
arrive at a measure that we believe is more representative of our
investment activities. Substantially all the funding we provide to
NGHC is limited for use by the venture for capital
expenditures.
A reconciliation of cash used for investing activities to our
reported capital expenditures is provided below:
|
Three Months
Ended
|
|
31 December
|
|
2023
|
2022
|
Cash used for investing
activities
|
$1,665.6
|
$256.2
|
Proceeds from sale of
assets and investments
|
4.2
|
4.0
|
Purchases of
investments
|
(55.5)
|
(19.2)
|
Proceeds from
investments
|
120.1
|
591.5
|
Other investing
activities
|
12.9
|
1.7
|
NGHC expenditures not
funded by Air Products' equity(A)
|
(361.6)
|
(109.7)
|
Capital
expenditures
|
$1,385.7
|
$724.5
|
(A) Reflects
the portion of "Additions to plant and equipment, including
long-term deposits" that is associated with
NGHC, less our approximate cash investment in the joint
venture
|
The components of our capital expenditures are detailed in the
table below:
|
Three Months
Ended
|
|
31 December
|
|
2023
|
2022
|
Additions to plant and
equipment, including long-term deposits
|
$1,445.5
|
$834.2
|
Investment in financing
receivables
|
301.8
|
—
|
NGHC expenditures not
funded by Air Products' equity(A)
|
(361.6)
|
(109.7)
|
Capital
expenditures
|
$1,385.7
|
$724.5
|
(A) Reflects
the portion of "Additions to plant and equipment, including
long-term deposits" that is associated with
NGHC, less our approximate cash investment in the joint
venture.
|
Outlook for Investing Activities
It is not possible, without unreasonable efforts, to reconcile
our forecasted capital expenditures to future cash used for
investing activities because we are unable to identify the timing
or occurrence of our future investment activity, which is driven by
our assessment of competing opportunities at the time we enter into
transactions. These decisions, either individually or in the
aggregate, could have a significant effect on our cash used for
investing activities.
We expect capital expenditures for fiscal year 2024 to be
$5.0 billion to $5.5 billion.
OUTLOOK
The guidance provided below is on an adjusted continuing
operations basis and is compared to adjusted historical diluted EPS
attributable to Air Products. These adjusted measures exclude the
impact of certain items that we believe are not representative of
our underlying business performance, such as the non-service
components of net periodic benefit/cost for our defined benefit
pension plans, the incurrence of costs for business, asset, and
cost reduction actions and impairment charges, or the recognition
of gains or losses on certain disclosed items. The per share impact
for each of our non-GAAP adjustments is calculated independently
and may not sum to total adjusted diluted EPS due to rounding.
It is not possible, without unreasonable efforts, to identify
the timing or occurrence of similar future events or the potential
for other transactions that may impact future GAAP EPS.
Furthermore, it is not possible to identify the potential
significance of these events in advance; however, any of these
events, if they were to occur, could have a significant effect on
our future GAAP EPS. Accordingly, management is unable to fully
reconcile, without unreasonable efforts, our forecasted range of
adjusted EPS on a continuing operations basis to a comparable GAAP
range.
|
|
|
|
Diluted
EPS
|
|
Q2
|
Full Year
|
2023
Diluted EPS
|
$1.97
|
$10.30
|
Business and asset
actions
|
0.69
|
0.92
|
Non-service pension
cost, net
|
0.08
|
0.29
|
2023
Adjusted Diluted EPS
|
$2.74
|
$11.51
|
2024
Adjusted Diluted EPS Outlook
|
$2.60
– $2.75
|
$12.20
– $12.50
|
$ Change
|
(0.14)
– 0.01
|
0.69
– 0.99
|
% Change
|
(5%)
– 0%
|
6% – 9%
|
View original
content:https://www.prnewswire.com/news-releases/air-products-reports-fiscal-2024-first-quarter-gaap-eps-of-2-73-and-adjusted-eps-of-2-82--302053159.html
SOURCE Air Products