Air Products and Chemicals, Inc.

Good morning and welcome to the Air Products first 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 Manjeshwar. Please go ahead.

Hi, thank you, Jennifer. Good morning, everyone. Welcome to Air Products first quarter 2024 Earnings Results Teleconference. This is Sid Manjeshwar, Vice President of Investor Relations and Corporate Treasurer. I am pleased to be joined today by Sethi Ghasemi, our Chairman, President, and CEO, Dr. Sameer Serhan, our Chief Operating Officer, Melissa Schaffer, our 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 and capital expenditure guidance, business outlook, and investment opportunities. Please refer to the cautionary notes 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 our 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 with that, I'm pleased to turn the call over to Stacey.

Thank you, Seth, and good day to everyone. Thank you for taking time from your very busy schedule to be on our call today. As always, I would like to begin with slide number three, our safety performance, which is our number one priority at Air Products. I'm very pleased to share that our employee recordable injury rate in first quarter was 78% than in 2014, and our employee lost time injury rate was at a record low, the best in the industry. Our ultimate goal will always be zero accidents and zero incidents. Now, please turn to slide number four, which summarizes our management philosophy. These principles remain fundamental to how we manage and grow our Now please turn to slide number five. I would like to take a few minutes to discuss the results for this quarter. Our first quarter adjusted earnings per share of $2.82 was 7% higher than last year. Our business performed well and we are moving forward. There were several positive contributions to this result, that included strong conversion margins, robust onsite activities in Americas and Europe, and higher quality affiliate income globally. Despite the year-to-year improvement that I just mentioned, our results diverged from the guidance range that we had given you due to several items that were not factored in our first quarter 2024 outlook. We have given you a forecast, and we are delivering less than the forecast. But again, I'd like to stress that we are 7% higher than last year. These factors that affected our guidance are, number one, larger than anticipated volume headwinds from weak economic growth in China. We were too optimistic about performance in China. Second one is lower helium demand in electronics, especially across the world, but I would like to mention that our pricing in helium stays very stable and very robust, but we have the volume was lower than we expected. There is a high, we had experienced higher costs for the sale of equipment project and the impact of Argentina's currency devaluation. With this, let me talk about our revised full-year guidance range. Please turn to slide number six. We now expect full-year adjusted earnings per share to be in the range of $12.20 to $12.50, which reflects the first quarter events I just discussed. It also reflects evolving geopolitical developments and uncertainties and continued weakness in Asia and helium volumes. This new range is supported by expected positive volume contributions from several new onsite plans and improvement in our LNG sale of equipment business, as well as continuing cost productivity that we always pursue. For the second quarter of fiscal year 2024, our adjusted earning per share guidance is $2.60 to $2.75. We continue to expect our capex to be between $5 billion and $5.5 billion in fiscal year 2024. Now, please turn to slide number seven. We are proud of our adjusted earnings per share improvement since 2014, and we have delivered on a consecutive basis for the last 10 years more than 10% annual growth in our earnings. I would like to take the time to thank each and every one of our employees around the world for their hard work and dedication and commitment, which has made it possible for us to deliver these excellent results. Now please turn to slide number eight. In addition to investing in high-return projects, We believe creating shareholder value includes returning cash to our investors by paying a healthy dividend directly to them. In January, we again raised our quarterly dividend to $1.77 per share per quarter, extending our record of 42 consecutive years of dividend increase. We expect to return approximately $1.6 billion to our shareholders in 2024 while continuing to execute hard-return industrial gas and clean hydrogen projects that support our customers in their sustainability journey and drive the energy transition. This balanced approach to capital allocation will allow us to meet our capital needs while maintaining our A2 credit rating. Now please turn to slide number nine, which shows our EBITDA margin trend since 2014. Our margins have returned to roughly 40% since the second half of fiscal year 2023, going 1,500 basis point improvement versus 2014. And our margins are leading industry margins, and they reflect the continued strength of our business model. Now, it's my pleasure to turn the call over to Melissa Schaefer, our Chief Financial Officer, to give you a summary of our first quarter 2024 results. Melissa?