Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Air Products & Chemicals Inc (APD, Financial) reported first quarter adjusted earnings per share of $2.86, exceeding the upper end of their guidance range.
- The company achieved a 140 basis point increase in adjusted EBITDA margin, driven by favorable business mix and pricing.
- The Americas segment showed strong performance with a 6% increase in adjusted EBITDA and a 150 basis point improvement in adjusted EBITDA margin.
- The Asia segment experienced a 2% volume improvement due to contributions from new assets, leading to a 7% increase in adjusted EBITDA.
- Air Products & Chemicals Inc (APD) maintained its fiscal 2025 full-year guidance, indicating confidence in its financial outlook despite external challenges.
Negative Points
- Overall volume was down 2% compared to last year, primarily due to the divestment of the LNG business.
- The Europe segment faced a 5% decline in volume, driven by lower upside and continued weakness in merchant demand, particularly helium.
- The Middle East and India segment experienced lower merchant volume and unfavorable equity affiliate income, impacting adjusted EBITDA negatively.
- The Uzbekistan project is undergoing planned facility upgrades, which may affect its contribution until the third quarter.
- The company is monitoring the strengthening US dollar and tariffs, which could potentially impact financial performance for the remainder of the year.
Q & A Highlights
Q: Given the moving parts in Asia, how should we think about the outlook considering past headwinds in the helium business and electronics recovery in China?
A: (Melissa Schaeffer, CFO) China was supported by new assets and productivity actions this quarter, but the market remains challenging with no material improvement. We are monitoring tariffs and the impact of China's in-country stimulus while focusing on productivity and customer delivery.
Q: Can you provide a breakdown of the fiscal year CapEx guidance of $4.5 billion to $5 billion?
A: (Melissa Schaeffer, CFO) The majority will be deployed to large projects, with $750 million for ongoing maintenance and about $1 billion for traditional industrial gas business. We maintain our forecast for this fiscal year.
Q: What was the helium EBITDA contribution in the Americas this quarter?
A: (Melissa Schaeffer, CFO) We don't break out helium specifically, but the nonrecurring helium sale contributed about $0.10 to EPS this quarter.
Q: How do you see the roles of Chairman and Vice Chairman differing?
A: (Wayne Smith, Chairman) With the ongoing changes, the Board is working well together. We will discuss roles more in the future as things progress.
Q: Does your outlook for 2025 assume any improvement in industrial activity or consumer demand?
A: (Melissa Schaeffer, CFO) We are not expecting significant improvement in global industrial production, with only about a 2% average increase globally.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
