#United States #Air Products #Hydrogen #Mantle Ridge #Lehigh Valley

Air Products' Strategic Stance and Performance

On December 13, 2024, Air Products' Board of Directors addressed shareholders directly in a letter that affirms the company's substantial achievements while refuting misleading statements from the activist firm Mantle Ridge. With a firm commitment to maintaining shareholder value and advancing its dual growth strategy, Air Products remains confident about its market position.

Key Highlights from the Letter

The letter emphasizes several pivotal points regarding Air Products' operational success:
1. Strong Industrial Gas Segment: Air Products continues to lead the industrial gases sector, driven by competitive adjusted EBITDA margins that exceed 40%. The core business focuses on atmospheric gases and hydrogen, positioning the company as the premier supplier globally.

2. Commitment to Clean Hydrogen: With over 80 years of industry experience, Air Products is poised to capitalize on the burgeoning market for clean hydrogen. The company is aggressively pursuing numerous initiatives aimed at establishing itself as a global leader in this field, which is projected to exceed $1 trillion in value by 2030.

3. Prudent Capital Allocation: Air Products boasts a disciplined investment strategy that prioritizes shareholder returns. The company has raised dividends for 42 consecutive years, showcasing a firm dedication to enhancing shareholder wealth.

Addressing Mantle Ridge’s Claims

Air Products' management firmly rejected the assertions made by Mantle Ridge, articulating clear reasons why the current leadership and strategy should remain undisturbed. Some of the key rebuttals include:

• - History of Value Destruction: Air Products points out Mastle Ridge’s questionable track record, highlighting past activist campaigns that led to significant value losses for other companies.
• - Lack of Concrete Plans: The Board expressed concerns over Mantle Ridge's vague campaign strategy. Air Products stressed that the proposed nominees from Mantle Ridge lack independence and relevant experience, which could adversely affect the company's strategic execution.
• - Commitment to Growth Strategy: Air Products has unveiled a solid two-pillar growth strategy aimed at expanding its core industrial gas operations and tapping into the clean hydrogen market, which could yield extensive long-term shareholder benefits.

The Importance of Your Vote

Ahead of the 2025 Annual Meeting scheduled for January 23, 2025, Air Products' Board urged shareholders to vote for the company’s nominee slate using the WHITE proxy card. They asserted that electing any of Mantle Ridge's nominees could jeopardize the progress made to date and disrupt ongoing initiatives essential for shareholder prosperity.

In summary, Air Products remains committed to executing its strategic priorities while fostering an environment that promotes shareholder value through continued innovation and effective management. As shareholders prepare to cast their votes, the Board highlights the peril of embracing disruption without the basis of sound strategy.