Air Products and Chemicals, Inc.

Good morning and welcome to Air Products and Chemicals' fourth quarter earnings release conference call. Today's call is being recorded at the request of Air Products. Please note that this presentation and the comments made on behalf of Air Products are subject to copyright by Air Products and all rights are reserved. Beginning today's call is Mr. Simon Moore, Vice President of Investor Relations.

Thank you, Leigh Ann. Good morning, everyone. Welcome to Air Products' fourth quarter 2020 earnings results teleconference. This is Simon Moore, Vice President of Investor Relations. I'm pleased to be joined today by Safi Ghasemi, our Chairman, President, and CEO, Scott Krakow, our Executive Vice President and Chief Financial Officer, and Sean Major, our Executive Vice President, General Counsel, and Secretary. After our comments, we will be pleased to take your questions. Our earnings release and the slides for this call are available on our website at airproducts.com. This discussion contains forward-looking statements. Please refer to the forward-looking statement disclosure that can be found in our earnings release and on slide number two. In addition, throughout today's discussion, we will refer to various financial measures. Unless we specifically state otherwise, when we refer to earnings per share, EBITDA, EBITDA margin, and ROCE, both on a company-wide and segment basis, we are referring to our adjusted non-GAAP financial measures. adjusted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and return on capital employed. Reconciliations of these measures to our most directly comparable GAAP financial measures can be found on our website in the relevant earnings release section. Now, I'm pleased to turn the call over to Sebi.

Thank you, Simon, and good day to everyone. As always, we thank you for taking time from your very busy schedule to be on our call today. Before we talk about our results this quarter, I would like to take to talk about 2020. Please turn to slide number three. I continue to believe that the true character and leadership of individuals and companies are revealed during times of crisis. And unfortunately, the war continues to be challenged by the COVID-19 crisis. Our number one priority has always been the safety and well-being of our people. We continue to provide them the necessary protective equipment and the right protocols to uphold their safety and health. I want to thank our employees for following these procedures and working hard to serve our customers and execute significant projects under challenging conditions. Throughout COVID-19 crisis, we have not reduced staff nor reduced the salaries of our people, and we remain committed to that course of action. Our people continue to do a great job in keeping all of our 750 plants running around the world. Meanwhile, our corporate and business functions continue to run smoothly and productively. Recognizing the greater needs during this time of crisis, We also have increased our commitment to our local communities through our volunteerism and financial support. Our robust business model continues to prove its resilience globally. As our onsite business remains stable, as we have mentioned before. In addition, we have maintained our focus on pricing discipline despite the lower volumes. And as you can see, our merchant business developed improved pricing in all of the regions. We were very proud to announce the $7 billion NEOM carbon-free hydrogen project, which will enable air products to supply truly carbon-free hydrogen to power buses and trucks around the world when it comes on the stream in 2025. This revolutionary and forward-looking project will demonstrate on a massive and commercial scale the possibility of a transportation system of the future based on a totally carbon-free source of energy that is the green hydrogen. He also signed a long-term on-site contract for a world-scale coal-to-methanol facility in Indonesia. This significant project supports Indonesia's focus on energy independence and will produce nearly 2 million tons per year of methanol when on a stream in 2024. We are very excited about the potential for additional opportunities in Indonesia. Now, please turn to slide number four. We continue to create and win megaprojects around the world that help our customers meet their most pressing needs for clean energy and environmental solutions. And we expect these projects to drive our growth for decades to come. This year, these projects included our largest ever investment in the United States for the Gulf Coast Ammonia Project in Texas. the acquisition of five operating hydrogen plants and a long-term hydrogen supply agreement with PBF Energy in California and Delaware, and multiple onsite projects for electronics manufacturers in China and Malaysia. We also began construction of three nitrogen plants in the Netherlands and brought on a stream an extreme methane reformer, and cold box in Louisiana to supply products to our U.S. Gulf Coast pipeline system. We are delighted to be selected for these large new projects, demonstrating our customers' confidence in our complete solution, delivered safely, on time, and on budget. Now, please turn to slide number five. Our industry-leading LNG technology was selected for major projects in Mozambique, Qatar, and Algeria. Our business model supports and enables our strong financial position, and we successfully raised about $5 billion of debt earlier this year to ensure we are ready for our exciting growth opportunities. We have significant balance sheet capacity remaining and are continuing to build strong positions in growth markets. With the board's focus on cleaner energy, we see gasification, carbon capture, and hydrogen creating profitable growth opportunities for air products. for many years to come. With our strong cash flow, we continue to complement our growth investments by returning cash directly to shareholders through our dividend. And we made new commitments to sustainability, the environment, which we are going to speak about in a moment. Now please stand for slide number six. I'm very pleased that our team stayed focused and worked safely throughout these challenging years. We obviously always want to see no accidents or incidents, but I'm pleased to see improvement versus our fiscal year 19 safety performance. The following slides, number seven, eight, and nine, you can see our goal, management philosophy, and five-point plan that we have shared with you many times before. While I'm not going to go through the details of each of these slides, since you have seen them many times before, I have included them as a continuing reminder of air products and delivering focus on cash generation and implementation of our well-defined strategy. Now, please turn to slide number 10, which is our higher purpose. We are obviously committed to delivering superior financial performance, but our people also know they are supporting the higher purpose in the work they do every day. Our higher purpose at Air Products is to bring people together from all over the world so that they can collaborate and develop innovative solutions to some of the most significant energy and environmental challenges we all face. That is our higher purpose, and it inspires our team and drives us every day. In support of our higher purpose and consistent with our focus on sustainability and environment, on slide 11, you can see our new diversity goals also. By 2025, air product aims to achieve at least 28% clean air representation in the professional and managerial population globally, and at least 20% minority representation in that same population in the United States. Our growth projects give us a unique opportunity to bring diverse talent into the company. And as we measure our progress, we will continually stretch and drive for further improvement. We also recently launched a legal advocacy program for racial and identity discrimination matters. Through this novel program, products will support employees and their dependents who have been subject to such discrimination outside the workplace. These are a few of the specific steps we are taking to continue building our culture of inclusion and belonging. Now please turn to slide number 12. Then you can see our third by 30 goal, which means that we intend to reduce our carbon emissions intensity by one-third by 2030. As I discussed this subject in September, This goal focuses on reducing emissions relative to the amount of energy that we are delivering to the world. It is fully aligned with our business's strategy. It is near-term and measurable and holds us accountable for delivering. Now please go to slide number 13 when we show you the key opportunities we have to achieve the third by 30 goal. One very important point is that this growth is enabled by and consistent with our profitable business growth opportunities. Carbon capture, carbon-free hydrogen, low-carbon projects, operational excellence, and renewable energy all support our 30 by 30 goal. Now, please turn to slide number 14. which highlights our key gasification projects. The fundamental drivers for gasification are still valid and very relevant today. Countries and large companies around the world continue to focus on gasification to convert abundant natural resources like coal, pet coal, and refinery bottoms, all of these low-value raw materials into high-value chemicals, transportation fuels, and energy in a sustainable manner using gasification. At this point, I think it's appropriate to specifically give you an update on our largest gasification project, the acquisition of gasifiers and power plants from Saudi Aramco in Jassan, Saudi Arabia. to work diligently to complete the financing and close all the open contractual terms. But as a result of the COVID-19 situation, these activities are taking much longer than we anticipated. Therefore, I would like to repeat on this call what I said on another public call in June of 2020. That is, my strong advice to investors is to please do not count your chickens until they are hatched as it relates to this acquisition. We will only close on this acquisition if the terms and conditions of the final contract and the expected financial returns are in line with our expectations. Now, please turn to slide number 15. where you can see that we have grown our EPS, the earning per share, by over 10% on average over the last six years. And then slide number 16 is a reminder that while we are continuing to develop these exciting growth opportunities, we have also grown our dividend by 10% on average over the last six years. This continues our record of raising a dividend every year for the past 30 years, and we will provide about $1.2 billion in dividends to our shareholders this year. And finally, slide number 17 shows our EBITDA margin, which is obviously my favorite slide, where it shows that the margin is up over 1,500 basis points since 2014, and more than 40% EBITDA margin for the sixth consecutive quarter, despite the COVID-19 challenges this year. I would like to thank all of our dedicated and hardworking people around the board for staying focused on safely operating more than 750 facilities around the board and serving our customers. Thank you again. Now I would like to turn the call over to Mr. Scott Calco, our senior vice president, our executive vice president, and chief financial officer to provide a financial overview. Scott?