#United States #Air Products #Seifi Ghasemi #clean hydrogen #Lehigh Valley

Air Products Reveals Investor Presentation Highlighting Strategic Growth

Air Products Inc., a leading industrial gases company, has unveiled an investor presentation that outlines its effective dual-growth strategy designed to enhance shareholder value. Under the leadership of Chairman and CEO Seifi Ghasemi, the company has achieved remarkable success, boasting over $44 billion in shareholder value creation since 2014. This achievement highlights Air Products' enviable position as a leader in the industrial gas market.

A Dual Growth Strategy

The two-pillar strategy focuses on expanding the core industrial gas business while also capitalizing on its first-mover advantage in the burgeoning clean hydrogen market. As the global energy landscape evolves with a pronounced shift towards more sustainable solutions, Air Products aims to position itself at the forefront of clean energy innovation.

To reinforce this strategy, the company has invested significantly in expanding its core business capabilities, demonstrated by robust increases in adjusted EBITDA margins and consistent earnings growth. The presentation confirms the commitment to further investment, with projections that significant portions of their capital expenditures through 2025 will cater to the core industrial gas business, ensuring sustained profitability in a competitive market.

Financial Performance Highlights

Under Ghasemi’s stewardship, Air Products has seen impressive financial growth. Key highlights include:

• - An increase of 1,400 basis points in adjusted EBITDA margins since 2014.
• - A compound annual growth rate of approximately 11% in adjusted earnings per share (EPS).
• - A consistent growth in sales, surpassing that of its primary competitors.

Additionally, the company has returned $11.5 billion to shareholders through dividends and share repurchases. Notably, their dividend has grown for 42 consecutive years, emphasizing a steady commitment to shareholder returns amidst increased investment in growth.

Clean Hydrogen: An Ambitious Growth Opportunity

As part of its dual strategy, Air Products is heavily focused on expanding its footprint in the clean hydrogen sector. Recognizing that 80% of global energy still comes from fossil fuels, Air Products sees clean hydrogen as a compelling alternative. Hydrogen, particularly the clean kind, presents a viable option for reducing carbon emissions and diversifying energy portfolios in line with global decarbonization efforts.

Independent forecasts project the clean hydrogen market will surge to over $600 billion by 2030, ramping up beyond $1 trillion by 2050. This growth is driven by clean hydrogen’s versatile applications across numerous sectors, including transportation, steel manufacturing, and power generation. With over 65 years of experience in hydrogen technologies, Air Products is well-positioned to seize these emerging market opportunities.

Early Successes in Clean Hydrogen

Air Products has initiated several pioneering projects within the clean hydrogen sector, including:

• - A groundbreaking 15-year agreement to supply green hydrogen to TotalEnergies for its refineries in Northern Europe from 2030.
• - Substantial commitment of 60% of capacity for its Canada Net-Zero Hydrogen Project.
• - Playing a pivotal role in the NEOM Green Hydrogen Complex project, the world's largest facility dedicated to producing green hydrogen-based ammonia.
• - Collaborating with Daimler to enhance hydrogen refueling infrastructure across Europe and North America.

These projects are supported by disciplined capital allocation strategies that prioritize long-term value creation and strategic risk management, expecting to generate positive net cash flow by FY2027.

Governance and Board Composition

As Air Products gears up for its upcoming 2025 Annual Meeting, the Board aims to reassure shareholders of its governance practices. With a commitment to refreshing its Board composition and ensuring independent oversight, the current leadership emphasizes the importance of experienced directors who understand the complexities of the industrial gases business. The recent communications address challenges from activist group Mantle Ridge, which proposes changes detrimental to the company’s momentum.

Air Products asserts that retaining its current Board will allow the company to maintain its successful trajectory, continuing to deliver substantial shareholder returns through operational excellence and strategic advancements in clean hydrogen.

In conclusion, Air Products remains committed to its dual-pillar strategy aimed at reinforcing its leadership in the industrial gas industry while shaping a sustainable future through clean hydrogen innovations. As the company positions itself for growth, stakeholders are encouraged to vote in favor of its nominees at the upcoming meeting, highlighting the Board's experience and vision for the future.