Air Products Reports Fiscal 2024 Second Quarter GAAP EPS of $2.57 and Adjusted EPS of $2.85

Commenting on the results, Air Products' Chairman, President and Chief Executive Officer Seifi Ghasemi said, "Focused on pricing and reducing our costs, we delivered in the second quarter of fiscal year 2024 despite the challenging economic and geopolitical circumstances. Our adjusted earnings per share of $2.85 exceeded the high end of our guidance for the quarter. Our adjusted EBITDA margin of 40.9% is leading the industry, and so is our safety performance. We are confident that with cost discipline, focus on pricing, and execution across the business, we will continue to create shareholder value and deliver our commitments. We also are solidifying our energy transition leadership as we continue to execute our strategic portfolio of low- and zero-carbon hydrogen projects around the world.”

Fiscal 2024 Second Quarter Results by Business Segment 

• Americas sales of $1.2 billion were down nine percent versus the prior year, due to 12 percent lower energy cost pass-through and one percent unfavorable currency, partially offset by three percent higher pricing and one percent higher volumes. Operating income of $372 million and adjusted EBITDA of $590 million both increased 15 percent, in each case primarily due to higher pricing and volumes. Adjusted EBITDA also benefited from higher equity affiliates' income. Operating margin of 29.9 percent increased 630 basis points and adjusted EBITDA margin of 47.4 percent increased 1,000 basis points. The operating margin and adjusted EBITDA margin improvements included positive impacts from lower energy cost pass-through of approximately 300 basis points and 450 basis points, respectively. 

• Asia sales of $780 million decreased four percent from the prior year, due to four percent unfavorable currency and one percent lower volumes, partially offset by one percent higher energy cost pass-through. Operating income of $204 million decreased 13 percent and adjusted EBITDA of $328 million decreased six percent, in each case primarily driven by volume and unfavorable currency. Operating margin of 26.1 percent decreased 250 basis points and adjusted EBITDA margin of 42.1 percent decreased 90 basis points.

• Europe sales of $668 million decreased eleven percent from the prior year, due to lower volumes and energy cost pass-through of six percent each and one percent lower pricing, partially offset by two percent favorable currency. Operating income of $201 million increased 16 percent and adjusted EBITDA of $264 million increased five percent primarily due to lower power and other costs. The favorable impact of these items on adjusted EBITDA was partially offset by lower equity affiliates' income. Operating margin of 30.1 percent increased 710 basis points and adjusted EBITDA margin of 39.5 percent increased 620 basis points. The operating margin and adjusted EBITDA margin improvements included positive impacts from lower energy cost pass-through of approximately 200 basis points and 250 basis points, respectively. 

• Middle East and India equity affiliates' income of $74 million decreased 25 percent compared to the prior year, primarily due to higher interest expense and other operating costs.

• Corporate and other sales of $201 million decreased seven percent compared to the prior year primarily due to lower non-LNG sale of equipment activity.  

Outlook

Air Products continues to expect 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 third quarter of fiscal 2024, Air Products' adjusted EPS guidance* is $3.00 to $3.05.

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 second quarter earnings teleconference scheduled for 8:30 a.m. Eastern Time on April 30, 2024 by calling 323-794-2575 and entering passcode 3708961 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 over $50 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 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.