Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - AIR PRODUCTS & CHEMICALS INC /DE/ | d790831d8k.htm |
| EX-99.2 - EX-99.2 - AIR PRODUCTS & CHEMICALS INC /DE/ | d790831dex992.htm |
 Seifi
Ghasemi Chairman, President and
Chief Executive Officer
September 18, 2014
Create Shareholder Value
Exhibit 99.1 |
 2
Forward looking statements
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, business outlook and the Company's future plans,
objectives, estimates and goals. Such statements address future conditions
including concerning profitability, operations, capital expenditures, cashflow and earnings.
These forward- looking statements are based on management's reasonable expectations
and assumptions as of the date of this release. Actual performance and financial
results may differ materially from projections and estimates expressed in the
forward-looking statements because of many factors not anticipated by management,
including, without limitation, weakening global or regional economic conditions; future
financial and operating performance of major customers or end markets; the Company's
ability to identify future markets and successfully expand existing ones; unanticipated
contract terminations or customer cancellations or postponement of projects and sales;
the impact of competitive products and pricing; unexpected changes in raw
material
supply
and
markets;
unanticipated
asset
impairments
or
losses;
the
ability
to
recover
increased
energy
and
raw
material
costs
from
customers;
costs
and
outcomes
of
litigation
or
regulatory
investigations;
the cost and impact of management and organizational changes, including the impact on the
Company's ability to retain qualified personnel; the success of restructuring and cost
reduction programs; the Company's ability to successfully develop and execute new
projects and technologies; significant fluctuations in interest rates and foreign
currencies from that currently anticipated; political risks, including the risks of unanticipated
government actions that may result in project delays, cancellations or expropriations; the
impact of changes in environmental, tax or other legislation and regulatory activities
in jurisdictions in which the Company and its affiliates operate; and other risk
factors described in the Company's Form 10-K for its fiscal year ended September
30, 2013. The Company disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained in this release to reflect any
change in the Company's assumptions, beliefs or expectations or any change in events,
conditions, or circumstances upon which any such forward-looking statements are
based. All financial figures are FY13 unless noted otherwise.
|
 3
$10.2
billion in sales
21,600
employees
50+
countries
273
on Fortune 500 list
7+
decades
in business
170,000+
customers
1800
miles of industrial
gas pipeline
750+
production
facilities
30+
industries
served
Air Products today |
 4
Air Products global presence
41%
U.S./Canada
26%
Europe
25%
Asia
8%
Latin
America |
 5
First 75 Days |
 •
Air Products has the people, technologies, and
geographic footprint
to deliver industry-leading
performance
•
The people of Air Products are ready for the
significant changes necessary to regain the
leadership position
we enjoyed 20 years ago
•
We will unlock the value potential through a
management
approach
that
empowers
and
motivates our employees
6
Observations –
First 75 Days |
 7
Moving Forward |
 Today’s
Agenda 8
Strategy
Path
Forward
•
Mission
•
Our Goal
•
Management Principles
•
Our Plan
•
Q4 FY14
•
Summary
•
Competitive Advantage |
 Our
Mission 9
Create
Shareholder
Value |
 Air Products
will be the safest
and the
most profitable
industrial gas company in the
world, providing excellent
service to our customers
10
Our Goal |
 •
The only acceptable goal is
zero accidents
•
Maintaining a safe workplace is a
fundamental and moral responsibility
11
Safest |
 As measured
by: •
EBITDA
as a percent of Sales
•
Operating
Profit as a percent of Sales
•
Return on Capital
12
Most Profitable |
 Air Products
will be the safest
and
the
most
profitable
industrial gas company in the
world, providing excellent
service to our customers
13
Our Goal |
 14
Management
Principles |
 Management
Principles 15
CEO Focus
Capital allocation is the most important
job of the CEO
Operating
Model
Decentralized organization releases
entrepreneurial energy and minimizes
costs and politics
Shareholder
Value
Cash is king; cash flow drives long-term value
What counts in the long term is the increase
in per share value of our stock, not size or
growth |
 16
Our Plan |
 17
Our 5 Point Plan
Focus on the Core
Restructure the Organization
Change Company Culture
Control Capital / Costs
Align Rewards |
 •
We
are
an
Industrial
Gas
company
and
will
continue to be going forward
•
Strengthen our
integrated supply
networks and
build density
•
Selective
geographic participation
where we
are advantaged
•
Sale
of
gas
and
sale
of
equipment
at
attractive
returns
18
Our Plan –
Focus on the Core |
 Our Plan
– Focus on the Core
19
Products
Integrated Supply Modes
Our Core
Businesses
Participate
based on
Profitability
•
Performance Materials & Electronic
Materials
•
Energy-from-Waste
•
Atmospheric Gases: O
2
, N
2
, Ar
•
Process & Specialty Gases: H
2
, He, CO
2
•
Equipment: LNG, He Containers
•
Onsite / Pipeline, Liquid / Bulk, Packaged |
 •
Decentralized organization
•
Geographic focus and alignment
•
Empowered and accountable business managers
•
Reduced and streamlined management layers
•
Detailed operating metrics
20
2. Our Plan –
Restructure Organization |
 Our Plan
– Reporting Segments
21
Energy from
Waste
Gases -
Americas
Gases -
EMEA
Global
Gases
Corporate
Materials
Technologies
Gases -
Asia
$3,900
38%
$2,100
21%
$1,600
16%
$310
3%
$420
4%
n/a
$1,900
18%
Industrial Gases
(FY13 Revenue $MM, %) |
 Chairman,
President & CEO
S. Ghasemi
Our Plan –
New Organization
22
SVP & CAO
J. Stanley
SVP & CFO
S. Crocco
VP
Energy from Waste
D. Taylor
VP
HR
J. Grant
President
Americas
C. Painter
President
EMEA
I. Bols
VP
Ops. Excel.
R. Boocock
Joint Ventures
S. Ghasemi
Mexico
India
Thailand
S. Africa
Italy
EVP
Materials Tech.
G. Novo
VP
Perf. Mat.
R. Thomas
VP
Elect. Mat.
W. Mitchell
President
Asia
W. Mok
EVP
Industrial Gases
C. Painter
SVP
Eng. & Mfg.
P. Mattimore
VP
HyCO & LASU COE
J. Byrne
VP
Corp. Dev.
K. Klein |
 3. Our
Plan – Change Culture
23
Self-Confidence
•
Every employee at Air Products is as
capable, or more capable than, any
one of our competitors’
employees
•
As a team, we can and will be the best
•
We are a team working together to win
•
We are not just doing a job, we are
committed to excellence
Safety
•
Enjoyable place to work
•
Encourages people to get involved
•
Disciplined approach to every job
•
More efficient and profitable operation
Simplicity
•
Simple and clear structure
•
Simple work and decision-making
processes
•
Simple and well-understood reward
system based on areas of
responsibility
Speed
•
Get it done
•
Sense of urgency
•
Fast response to customer needs
•
Once a decision is made, implement! |
 Capital
Allocation •
We will not spend more than we can afford
•
We have raised required project returns and
lowered delegations of authority for capital spend
Cost / Efficiency Program
•
Reduce Corporate overhead
•
Drive operational improvement across the network
24
4. Our Plan –
Control Capital / Costs |
 •
Annual incentive plan based on aggressive EBITDA
targets at business unit level
•
Long-term equity plan totally aligned with
shareholder value creation
•
Significant stock ownership by senior
management
25
5. Our Plan –
Align Rewards |
 Our Plan
– 5 Point Plan Summary
26
Restructure
Organization
Decentralize
Geographic
alignment
Control
Capital/Costs
Capex
Hurdle rates
Corporate
cost
Ops. / Dist.
efficiency
Change
Culture
Safety
Simplicity
Speed
Self-confidence
Align
Rewards
Reward
performance
EBITDA / value
creation target
Focus on
the Core
Industrial
gases
Key
geographies |
 27
Fourth Quarter
Guidance |
 •
Guidance
was
$1.60
-
$1.65
EPS
•
Today we are reconfirming our guidance;
midpoint would be the highest quarterly earnings
the Company has ever achieved by over 10% 28
Fiscal Year 2014 –
4th Quarter |
 Summary
29
Mission
Create value for shareholders
Our Goal
Be the
safest
and
most
profitable
Management
Principles
Cash is king
Capital allocation
Decentralized organization |
 30
Summary
Our Plan
Industrial gases
Focus on the Core
Geographic focus
Restructure the Organization
Safest, Simplicity, Speed,
Self-confidence
Change Company Culture
Raise hurdle rates /
overhead and efficiency
Control Capital / Costs
EBITDA short-term /
TSR long-term
Align Rewards
1
2
3
4
5 |
 The only
sustainable element of long-term competitive advantage
is
the
degree
of
commitment
and
motivation
of
the
people
in the enterprise
31
Our Competitive Advantage |
 32
Moving Forward |
 tell me
more Thank you
tell me more |
 Our Plan
– Reporting Segments
34
Energy from
Waste
Gases -
Americas
Gases -
EMEA
Global
Gases
Corporate
Materials
Technologies
Gases -
Asia
$3,900
38%
$2,100
21%
$1,600
16%
$310
3%
$420
4%
n/a
$1,900
18%
Industrial Gases
(FY13 Revenue $MM, %)
•
Onsite / Pipeline
–
Air Separation Unit (ASU) –
O
2
, N
2
, Ar
–
Hydrogen/HyCO
•
Liquid / Bulk –
O
2
, N
2
, Ar, He, etc
•
Packaged Gases
•
Sale of
Equipment
(ASU,
non-cryo)
•
Performance
Materials
•
Electronics
Materials
•
Tees Valley
•
LNG
Equipment
•
Helium
containers
•
Corporate
Costs |
 Appendix:
Guidance 35
EPS Guidance
Diluted
Q4 Guidance
EPS
(1)
Q413 GAAP
$0.70
Business Restructuring Charge
$0.74
Advisory Costs
$0.03
Q413 Non GAAP
$1.47
Q414 Guidance
$1.60-$1.65
% Change
9%-12%
Diluted
Full Year Guidance
EPS
(1)
FY13 GAAP
$4.73
Business Restructuring Charge
$0.74
Advisory Costs
$0.03
FY13 Non GAAP
$5.50
FY14 Guidance
$5.72-$5.77
% Change
4%-5%
(1)
Continuing operations, attributable to Air Products |