Air Products and Chemicals, Inc.

Good morning and welcome to the Air Products and Chemicals Second Quarter Earnings Release Conference Call. Today's conference 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. Please go ahead, sir.

Thank you, Rochelle. Good morning, everyone. Welcome to Air Products' second quarter 2021 earnings results teleconference. This is Simon Moore, Vice President of Investor Relations, Corporate Relations, and Sustainability. I am pleased to be joined today by Sethi 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, the effective tax rate, 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, adjusted effective tax rate, 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. We thank you for taking time from your very busy schedule to be on our call today. To start, I want to acknowledge the United and extraordinary efforts of all of the talented committed and resilient people of air products around the world they work hard every day to provide critical products and services to our customers our people working in solidarity and in a determined way have made it possible for us to keep our 750 facilities around the world operating throughout this unprecedented crisis. And I want to particularly thank our team who worked through the very challenging severe winter storm in the U.S. Gulf Coast. Our people are the ones who are making it possible for us to continue to deliver our near-term business results while also pushing forward to develop, execute, and operate major world-class projects to ensure our growth in the future. Our people are the ones who make our higher purpose real every day. That is, to help humanity move forward in a sustainable way and bring people together to help solve energy and environmental challenges. Now, please turn to slide number three. As always, safety is the most important focus for all of us at Air Product. It is a moral responsibility to keep our people safe, and our goal will always be zero accidents and zero incidents. Despite the challenging COVID-19 conditions, our team continues to focus on working safely following our strict protocols to help protect themselves, our customers, and our communities. I also want to emphasize that sustainability is at the core of our DNA, and it drives our growth opportunities. We will be issuing our annual sustainability report later this month and I look forward to continuing this very important conversation with you. Now, please turn to slides four, five, and six. You can again see our goal, our management philosophy, and our five-point plan for moving forward. These are the guiding principles that we follow every day, and they will continue to guide us in the future. Now, please turn to slide number seven. We remain committed to delivering superior financial performance. And as I said, our people also know they are supporting a higher purpose in the work they do every day. Our industrial gas expertise in many areas is critical to the success of dozens of industries. And the scope and complexity of our mega projects require talented people with a variety of skills and backgrounds from different parts of the world to work together as one team. We are proud to bring people from diverse backgrounds and experiences together to cooperate and developed innovative solutions for some of the most challenging energy and environmental problems in the world. That is our higher purpose, and it inspires our team and drives us forward every day. Now, please turn to slide number eight, which highlights our gasification projects. We are committed to our gasification strategy and are pursuing exciting projects around the world. We continue to see countries and large companies driving to convert low-value feedstock into high-value finished products. They have identified gasification as the best way to use abundant low-value resources like coal, pet coal, and refinery bottoms in a sustainable manner. And we are in the best position to work with them and help them deliver better, more sustainable solutions that benefit their economies and their people. Consistent with our strategy, we are pleased to have completed the acquisition of the remaining 50% share of our gasification technology joint venture in China. Now that this team will be 100% part of AIR products, we are confident this will make us even more successful to pursue and win new large-scale gasification projects. We do expect to announce additional gasification projects in the future. Now, specifically, I would like to give you an update on the two large gasification projects which I have discussed during our last two earning calls. First, our $12 billion acquisition of the Jazan gasifier and power plant from Saudi Aramco. We have continued to make significant progress working with our partners and the lenders since our last update. the team has worked hard to bring the project to the final stage of project financing. Barring any unforeseen circumstances, we expect this project to reach financial close in this fiscal year. I also want to provide you an update on Luan. During our second quarter, we continue to recognize a reduced monthly fee under our interim agreement while our customer's plant was shut down. But I am very pleased to announce that our customer has requested the startup of our facility and we are proceeding with the commissioning of our plant. Since our equipment has been idle for several quarters, it will require a period of time to bring all four gasifiers back on. But for your information, as of this morning, the first gasifier was online making synthetic gas and supplying our customers. So we are encouraged by this development. Now please turn to slide number nine which shows our EPS growth. As you can see, we have delivered greater than 10% annual EPS growth since 2014, despite the adversities presented by the recent external challenges. This is a testament to the hard work of our people and the stability of our business. This year, Again, we expect to achieve nearly 10% EPS growth in challenging conditions. I will discuss our expectation for this year in more detail later in the call. Now, please turn to slide number 10, a reminder that we share our earnings and its growth with our investors. Both our EPS and dividends have grown double digits since 2014. While we continue to develop our exciting growth opportunities, we have significant cash flow that supports our substantial dividend that we have increased for the last 39 consecutive years. And finally, slide number 11 shows our EBITDA margin as always, my favorite slide, where it shows that the margin is up over 1,200 basis points since 2014. Margin is down slightly primarily due to the significantly higher energy pass-through for natural gas, which increases our sales but doesn't impact profits. I'm very proud of our team who delivered EBITDA margin over 37% for the quarter, despite the challenges of the pandemic and the winter storm affecting the U.S. Gulf Coast. Now I would like to turn the call over to Mr. Scott Krakow, our Executive Vice President and Chief Financial Officer, to provide a financial review. Scott?