Air Products Reports Fiscal 2024 Fourth Quarter GAAP EPS of $8.81 and Adjusted EPS of $3.56
Fiscal Year 2024 (comparisons versus prior year):
GAAP EPS# of $17.24, up 67 percent; GAAP net income of $3.9 billion, up 65 percent; and GAAP net income margin of 31.9 percent, up 1,330 basis points
Adjusted EPS* of $12.43, up eight percent; adjusted EBITDA* of $5.0 billion, up seven percent; and adjusted EBITDA margin* of 41.7 percent, up 440 basis points
Q4 FY24 (comparisons versus prior year):
GAAP EPS# of $8.81, up 186 percent; GAAP net income of $2.0 billion, up 181 percent; and GAAP net income margin of 61.2 percent, up 3,940 basis points
Adjusted EPS* of $3.56, up 13 percent; adjusted EBITDA* of $1.4 billion, up 12 percent; and adjusted EBITDA margin* of 44.1 percent, up 460 basis points
Fiscal 2024 and Recent Highlights
Creating shareholder value
Delivered fiscal fourth quarter adjusted EBITDA margin* of 44.1 percent and fiscal year 2024 adjusted EBITDA margin* of 41.7 percent
Increased dividend to $1.77 per share, with approximately $1.6 billion of dividend payments to shareholders in 2024
Core industrial gas business
Completed divestiture of non-core liquefied natural gas ("LNG") process technology and equipment business to Honeywell for $1.81 billion in an all-cash transaction
Announced plans to construct two new air separation units at the Company's Conyers, Georgia, and Reidsville, North Carolina locations to serve local merchant markets
Announced $70 million investment to expand gas separation and purification membranes at the Company's Missouri manufacturing and logistics center, driven by growing product demand in biogas and hydrogen recovery applications, as well as customer needs for the use of nitrogen for the aerospace industry and cleaner fuels for the marine industry
Clean hydrogen / energy transition
Signed a 15-year agreement to supply 70,000 tons of green hydrogen annually starting in 2030, helping to decarbonize TotalEnergies' Northern European refineries and avoid approximately 700,000 tons of CO₂ each year
Announced plans to build networks of permanent, commercial-scale, multi-modal hydrogen refueling stations in California, Canada and Europe
Announced trial of a Daimler Mercedes-Benz GenH2 truck, aligned with Air Products' goal to convert its distribution fleet to hydrogen powered vehicles
Sustainability
Awarded 'A' rating on MSCI's environmental, social and governance ratings
Listed among Barron's 100 Most Sustainable Companies for the sixth consecutive year
Set additional sustainability goals, including committing to quadruple renewable energy used to make the Company's products by 2030 compared to a 2023 baseline; signed 10-year Power Purchase Agreements for renewable energy with Tatung Forever Energy (Taiwan) and Eneco (The Netherlands)
Guidance
Fiscal 2025 full-year adjusted EPS guidance* of $12.70 to $13.00; fiscal 2025 first quarter adjusted EPS guidance* of $2.75 to $2.85
Expect fiscal year 2025 capital expenditures* in the range of $4.5 billion to $5.0 billion
Air Products completed the divestiture of its LNG business on September 30, 2024; therefore, this business will not contribute to fiscal 2025 results and, accordingly, is not reflected in fiscal 2025 guidance. Refer to page 9 below for additional information.
#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.
LEHIGH VALLEY, Pa., Nov. 7, 2024 /PRNewswire/ --
Fiscal 2024 Full-Year Consolidated ResultsAir Products (NYSE:APD) today reported full-year fiscal 2024 results, including GAAP EPS from continuing operations of $17.24, up 67 percent from the prior year. GAAP net income of $3.9 billion was up 65 percent and GAAP net income margin of 31.9 percent increased 1,330 basis points, in each case primarily due to a $1.2 billion after-tax gain recognized upon the sale of the Company's former LNG business at the end of the fourth quarter.
Air Products' full-year GAAP results for the current and prior year include items that are adjusted in the non-GAAP measures discussed below. Fiscal 2024 items include a gain of $5.38 per share resulting from the sale of the LNG business, partially offset by a charge to operating income of $0.20 per share for business and asset actions as well as non-operating costs of $0.34 per share and $0.02 per share for non-service pension costs and a loss on de-designated cash flow hedges, respectively. Items for the prior year included a charge to operating income of $0.92 per share for business and asset actions as well as non-operating non-service pension costs of $0.29 per share.
For the year, on a non-GAAP basis, adjusted EPS from continuing operations of $12.43 increased eight percent over the prior year. Adjusted EBITDA of $5.0 billion was up seven percent primarily due to positive pricing, net of variable costs, favorable business mix, and improved productivity, partially offset by inflation and higher planned maintenance. Adjusted EBITDA margin of 41.7 percent increased 440 basis points, with lower energy cost pass-through contributing approximately 200 basis points.
Full-year sales of $12.1 billion decreased four percent compared to the prior year due to five percent lower energy cost pass-through, which was partially offset by one percent higher pricing.
Fiscal 2024 Fourth Quarter Consolidated ResultsAir Products also reported fourth quarter fiscal 2024 results, including GAAP EPS from continuing operations of $8.81, up 186 percent from the prior year. GAAP net income of $2.0 billion was up 181 percent and GAAP net income margin of 61.2 percent increased 3,940 basis points, in each case primarily due to the $1.2 billion after-tax gain recognized upon the sale of the Company's former LNG business.
Air Products' fourth quarter GAAP results for the current and prior year include items that are adjusted in the non-GAAP measures discussed below. Fourth quarter fiscal 2024 items include a gain of $5.38 per share resulting from the sale of the LNG business, partially offset by non-operating costs of $0.09 per share and $0.03 per share for non-service pension costs and a loss on de-designated cash flow hedges, respectively. Items for the prior year quarter included a non-operating cost of $0.08 per share for non-service pension costs.
For the quarter, on a non-GAAP basis, adjusted EPS from continuing operations of $3.56 increased 13 percent over the prior year. Adjusted EBITDA of $1.4 billion was up 12 percent over the prior year, primarily driven by higher volumes and positive pricing. Adjusted EBITDA margin of 44.1 percent increased 460 basis points over the prior year, with lower energy cost pass-through contributing approximately 100 basis points.
Fourth quarter sales of $3.2 billion were flat versus prior year as one percent each higher volumes and pricing were offset by two percent lower energy cost pass-through.
Commenting on the results, Air Products' Chairman, President and Chief Executive Officer Seifi Ghasemi said, "For our fiscal fourth quarter, the team at Air Products delivered adjusted EPS up 13 percent over last year and industry-leading adjusted EBITDA margin of more than 44 percent. We also completed the strategic divestiture of the LNG business at the end of September, demonstrating our commitment to our core industrial gas business while providing clean hydrogen at scale to serve significant demand in the heavy transportation and industrial sectors. The 15-year supply agreement we signed with TotalEnergies to provide 70,000 tons of green hydrogen annually starting in 2030 is a great example of our ability to sign offtake agreements that are aligned to our traditional on-site business model. Air Products also continues to generate strong and steady cash flow that supports disciplined capital allocation and our long history of returning cash to shareholders. This year, we expect to pay out approximately $1.6 billion in dividends to our shareholders."
Fiscal 2024 Fourth Quarter Results by Business Segment
Americas sales of $1.3 billion were down three percent versus the prior year, as five percent lower energy cost pass-through and one percent unfavorable currency were partially offset by three percent higher pricing. Volume was flat as higher on-site was offset by lower merchant demand. Operating income of $448 million increased 13 percent and adjusted EBITDA of $668 million increased 11 percent, in each case primarily due to higher pricing and favorable mix driven by a one-time asset sale associated with an early contract termination at the request of a customer and higher hydrogen demand. Operating margin of 34.2 percent increased 480 basis points and adjusted EBITDA margin of 51.1 percent increased 660 basis points, including positive impacts from lower energy cost pass-through of approximately 150 and 200 basis points, respectively.
Asia sales of $861 million increased seven percent from the prior year on seven percent higher volumes and one percent higher energy cost pass-through, partially offset by one percent lower pricing. Operating income of $244 million increased 24 percent and adjusted EBITDA of $383 million increased 21 percent, in each case primarily due to higher volumes and lower costs. Operating margin of 28.4 percent increased 380 basis points and adjusted EBITDA margin of 44.5 percent increased 490 basis points.
Europe sales of $731 million increased three percent from the prior year as two percent higher pricing and two percent favorable currency were partially offset by one percent lower energy cost pass-through. Volume was flat as new on-site assets were offset by lower merchant demand. Operating income of $207 million increased 23 percent and adjusted EBITDA of $292 million increased 17 percent, in each case primarily due to higher pricing. Operating margin of 28.3 percent increased 470 basis points and adjusted EBITDA margin of 40.0 percent increased 490 basis points.
Middle East and India equity affiliates' income of $92 million was flat with the prior year.
Corporate and other sales of $257 million decreased 11 percent compared to the prior year, primarily due to lower equipment sales and higher cost estimates related to sale of equipment activities.
OutlookAir Products expects full-year fiscal 2025 adjusted EPS guidance* of $12.70 to $13.00. For the fiscal 2025 first quarter, Air Products' adjusted EPS guidance* is $2.75 to $2.85.
Air Products expects capital expenditures* in the range of $4.5 billion to $5.0 billion for full-year fiscal 2025.
Air Products completed the divestiture of its LNG business on September 30, 2024; therefore, this business will not contribute to fiscal 2025 results and, accordingly, is not reflected in fiscal 2025 guidance. Refer to page 9 below for additional information.
*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 TeleconferenceAccess the fiscal 2024 fourth quarter earnings teleconference scheduled for 8:30 a.m. Eastern Time on November 7, 2024 by calling 773-305-6853 and entering passcode 9129758 or by accessing the Event Details page on Air Products' Investor Relations website.
About Air ProductsAir Products (NYSE: APD) is a world-leading industrial gases company in operation for over 80 years focused on serving energy, environmental, and emerging markets and generating a cleaner future. The Company supplies essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, medical and food. As the leading global supplier of hydrogen, Air Products 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 industrial and heavy-duty transportation sectors. The Company also provides turbomachinery, membrane systems and cryogenic containers globally.
Air Products had fiscal 2024 sales of $12.1 billion from operations in approximately 50 countries and has a current market capitalization of over $65 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 execute agreements with customers and 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, divestitures, and joint venture activities, as well as 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.
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Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three Months Ended
Twelve Months Ended
30 September
30 September
(Millions of U.S. Dollars, except for share and per share data)
2024
2023
2024
2023
Sales
$3,187.5
$3,191.3
$12,100.6
$12,600.0
Cost of sales
2,104.4
2,207.2
8,168.7
8,833.0
Selling and administrative expense
228.0
232.7
942.4
957.0
Research and development expense
22.1
24.7
100.2
105.6
Gain on sale of business
1,575.6
—
1,575.6
—
Business and asset actions
—
—
57.0
244.6
Other income (expense), net
15.8
11.9
58.2
34.8
Operating Income
2,424.4
738.6
4,466.1
2,494.6
Equity affiliates' income
177.1
163.4
647.7
604.3
Interest expense
49.7
48.0
218.8
177.5
Other non-operating income (expense), net
(48.5)
(12.8)
(73.8)
(39.0)
Income From Continuing Operations Before Taxes
2,503.3
841.2
4,821.2
2,882.4
Income tax provision
538.4
154.2
944.9
551.2
Income From Continuing Operations
1,964.9
687.0
3,876.3
2,331.2
(Loss) Income from discontinued operations, net of tax
(13.9)
7.4
(13.9)
7.4
Net Income
1,951.0
694.4
3,862.4
2,338.6
Net income attributable to noncontrolling interests of continuing operations
1.1
1.8
34.2
38.4
Net Income Attributable to Air Products
$1,949.9
$692.6
$3,828.2
$2,300.2
Net Income Attributable to Air Products
Net income from continuing operations
$1,963.8
$685.2
$3,842.1
$2,292.8
Net (loss) income from discontinued operations
(13.9)
7.4
(13.9)
7.4
Net Income Attributable to Air Products
$1,949.9
$692.6
$3,828.2
$2,300.2
Per Share Data (A) (U.S. Dollars per share)
Basic EPS from continuing operations
$8.82
$3.08
$17.27
$10.31
Basic EPS from discontinued operations
(0.06)
0.03
(0.06)
0.03
Basic EPS attributable to Air Products
$8.76
$3.11
$17.21
$10.35
Diluted EPS from continuing operations
$8.81
$3.08
$17.24
$10.30
Diluted EPS from discontinued operations
(0.06)
0.03
(0.06)
0.03
Diluted EPS attributable to Air Products
$8.75
$3.11
$17.18
$10.33
Weighted Average Common Shares (in millions)
Basic
222.6
222.4
222.5
222.3
Diluted
222.8
222.8
222.8
222.7
(A)
Earnings per share ("EPS") is calculated independently for each component and may not sum to total EPS due to rounding.
Air Products and Chemicals, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
30 September
30 September
(Millions of U.S. Dollars)
2024
2023
Assets
Current Assets
Cash and cash items
$2,979.7
$1,617.0
Short-term investments
5.0
332.2
Trade receivables, net
1,821.6
1,700.4
Inventories
766.0
651.8
Prepaid expenses
179.9
177.0
Other receivables and current assets
610.8
722.1
Total Current Assets
$6,363.0
$5,200.5
Investment in net assets of and advances to equity affiliates
4,792.5
4,617.8
Plant and equipment, at cost
39,950.9
32,746.3
Less: accumulated depreciation
16,580.0
15,274.2
Plant and equipment, net
$23,370.9
$17,472.1
Goodwill, net
905.1
861.7
Intangible assets, net
311.6
334.6
Operating lease right-of-use assets, net
1,047.7
974.0
Noncurrent lease receivables
392.1
494.7
Financing receivables
1,220.2
817.2
Other noncurrent assets
1,171.5
1,229.9
Total Noncurrent Assets
$33,211.6
$26,802.0
Total Assets
$39,574.6
$32,002.5
Liabilities and Equity
Current Liabilities
Payables and accrued liabilities
$2,926.2
$2,890.1
Accrued income taxes
558.5
131.2
Short-term borrowings
83.5
259.5
Current portion of long-term debt
611.4
615.0
Total Current Liabilities
$4,179.6
$3,895.8
Long-term debt
13,428.6
9,280.6
Long-term debt, related party
104.4
150.7
Noncurrent operating lease liabilities
677.9
631.1
Other noncurrent liabilities
1,350.5
1,118.0
Deferred income taxes
1,159.9
1,266.0
Total Noncurrent Liabilities
$16,721.3
$12,446.4
Total Liabilities
$20,900.9
$16,342.2
Air Products Shareholders' Equity
17,036.5
14,312.9
Noncontrolling Interests
1,637.2
1,347.4
Total Equity
$18,673.7
$15,660.3
Total Liabilities and Equity
