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 per cent; GAAP net income of $3.9 billion, up 65 per cent; and GAAP net income margin of 31.9per per cent, up 1,330 basis points
  • Adjusted EPS* of $12.43, up eight cents; adjusted EBITDA* of $5.0 billion, up seven per cent; and adjusted EBITDA margin* of 41.7per cent, up 440 basis points
Q4 FY24 (comparisons versus prior year):
  • GAAP EPS# of $8.81, up 186 per cent; GAAP net income of $2.0 billion, up 181 per cent; and GAAP net income margin of 61.2per per cent, up 3,940 basis points
  • Adjusted EPS* of $3.56, up 1per centnt; adjusted EBITDA* of $1.4 billion, up 12 per cent; and adjusted EBITDA margin* of 44.1per centt, up 460 basis points
Fiscal 2024 and Recent Highlights
   Creating shareholder value
  • Delivered fiscal fourth quarter adjusted EBITDA margin* of 44.per cent and fiscal year 2024 adjusted EBITDA margin* of 41.7 per cent
  • 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 a $70 million investment to expand gas separation and purification membranes at the Company's Missouri manufacturing and logistics centre, 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 refuelling 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.
Fiscal 2024 Full-Year Consolidated Results
Air Products (NYSE: APD) today reported full-year fiscal 2024 results, including GAAP EPS from continuing operations of $17.24, up 67 per cent from the prior year. GAAP net income of $3.9 billion was up 65per cent and GAAP net income margin of 31.per cent increased by 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 either percentage over the prior year. Adjusted EBITDA of $5.0 billion was up seven per cent primarily due to positive pricing, net of variable costs, favourable business mix, and improved productivity, partially offset by inflation and higher planned maintenance. Adjusted EBITDA margin of 41. per cent increased ed 440 basis points, with lower energy cost pass-through contributing approximately 200 basis points.
Full-year sales of $12.1 billion decreased by four per cent compared to the prior year due to a five per cent lower energy cost pass-through, which was partially offset by one per cent higher pricing.
Fiscal 2024 Fourth Quarter Consolidated Results
Air Products also report fourth-quarter fiscal 2024 results, including GAAP EPS from continuing operations of $8.81, up 186 per cent from the prior year. GAAP net income of $2.0 billion was up 181 per cent and GAAP net income margin of 61.2 per cent 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 per cent over the prior year. Adjusted EBITDA of $1.4 billion was up 12 per cent over the prior year, primarily driven by higher volumes and positive pricing. Adjusted EBITDA margin of 44.1 cents 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 the prior year as one per cent each higher volumes and pricing were offset by two per cent lower energy cost pass-through.
Commenting on the results, AirProducts' Chairman, President and Chief Executive Officer Seifi Ghasemi said, "For our fiscal fourth quarter, the team at Air Products delivered adjusted EPS up 13 per cent over last year and industry-leading adjusted EBITDA margin of more than 44per cent. 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 with 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 
· America of $1.3 billion were down three per cent versus the prior year, as five per cent lower energy cost pass-through and on one perentunfavourablele currency were partially offset by three per cent higher pricing. Volume was flat as higher on-site was offset by lower merchant demand. Operating income of $448 million increased per cent and adjusted EBITDA of $668 million increased per per cent, in each case primarily due to higher pricinfavourableorable 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 per cent from the prior year on seven per cent higher volumes and one per cent higher energy cost pass-through, partially offset by one per cent 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 per cent from the prior year as two per cent higher pricing and two per favourable currency were partially offset by percenters 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 per cent compared to the prior year, primarily due to lower equipment sales and higher cost estimates related to the sale of equipment activities.
Outlook
Air 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 in the earnings release with all financial tables for additional information.
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Air Products &n Chemicals   
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