Air Products and Chemicals, Inc.

Good morning and welcome to Air Products second 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. Sid Nangeshwar. Please go ahead.

Thank you, Taryn. Good morning, everyone. Welcome to Air Products' second quarter 2023 Earnings Results Teleconference. This is Sid Manjeshwar, Vice President of Investor Relations and Corporate Treasurer. I am pleased to be joined today by Sefi Ghasemi, our Chairman, President and CEO, Dr. Sameer Serhan, our Chief Operating Officer, Melissa Schaffer, our Senior 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. Today's discussion contains forward-looking statements, including those about earnings, capital expenditure guidance, business outlook and investment opportunities. Please refer to the cautionary note regarding forward-looking statements that is provided in our earnings release and on slide number two. Additionally, throughout today's discussion, we will refer to various financial measures, including earnings per share, operating income, operating margin, EBITDA, EBITDA margin, the effective tax rate, and ROCE, both on a total company and segment basis. Unless we specifically state otherwise, statements regarding these measures are referring to our adjusted non-GAAP financial measures. Reconciliation 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 Sethi.

Thank you, Seth, and good day to everyone. Thank you for taking time from your very busy schedule to be on our call today. I am proud to say that our people delivered another set of outstanding results this quarter. continuing to grow our business in a challenging environment. Our team also continued to make great progress in executing our growth strategy, which is focused on the production of low carbon and zero carbon hydrogen. I would like to thank each one of our talented, dedicated, and motivated employees at Air Products for their commitment and hard work. Now please turn to slide number three, our safety performance, which is always our highest priority. As you can see, we have made significant progress since 2014, but we are always working hard to do better. I want to make it clear that our goal is to achieve zero incidents and zero accidents. Slide number four, which we have shown you many, many times before, summarizes our management philosophy, which is critical to a product's success and will continue to guide our actions as we move forward. Now please turn to slide number five. Our second quarter adjusted earnings of $2.74 per share improved 40 cents, or 17%, versus last year, despite the lingering economic headwinds in many parts of the world, and exceeded the top line of our guidance for the quarter. We have consistently delivered earnings and top line growth, driven by both price and volume, which were collectively up 14% for the quarter versus quarter of last year. We also brought new projects on the stream that further enhanced our earnings. Our roughly $16 billion of backlog with more than 11 billion focused on energy transition will continue to drive long-term earnings growth. Now please turn to slide number six. As mentioned last quarter, we have again raised our quarterly dividend this year up 8% to $1.75 per share per quarter, extending our record of more than 40 consecutive years of dividend increase. We expect to pay out more than $1.5 billion to our shareholders in 2023, demonstrating our commitment to return cash to shareholders. Now please turn to slide number seven, which shows our EBITDA margin trend. This continues to be my favorite slide as it shows our business performance over time. We were happy to see our margins improved over the past two quarters after the decline, which was caused largely due to the diluted effect of higher energy costs passed through. That increases our sales but doesn't increase our bottom line. We expect our margin to move higher as energy costs decrease while we continue to improve productivity in our base business and add new projects. Now please turn to slide number eight, where I would like to share a few thoughts on our hydrogen strategy. We knew being a first mover in real mega projects has its challenges. and that novel ideas and approaches are sometimes met with skepticism initially. When we launched the Neon Green Hydrogen Project three years ago, we were the first hydrogen producer to capitalize on the idea of renewable energy resources in the Middle East and the first to recognize ammonia's potential as an effective transport medium for hydrogen. When we announced the Louisiana Blue Hydrogen Project in 2021, we were again first mover to act on carbon capture and sequestration on the U.S. Gulf Coast. Now, the promise of clean energy is a reality. These projects have gained significant government support around the world, and many companies have since followed our lead and want to become a hydrogen company announcing large clean hydrogen projects and exploring ammonia dissociation innovation. We believe these developments are actually good for the industry because a successful energy transition will require the work of many different companies, organizations, and governments around the world. As a global leading hydrogen producer, we are confident that our experience, know-how, and proprietary assets will continue to capture the first mover advantage and support air product success in leading clean energy and clean hydrogen development for the decades to come. Now, it is my pleasure to turn the call over to Melissa Schaefer, our Chief Financial Officer. Melissa?